(KMBN MK01) Unit 1: Introduction to Consumer Behavior

Introduction of Consumer Behaviour

Consumer behavior is all about understanding how people make decisions about what they buy, use, and dispose of. It looks at why we choose certain products or services over others. This can include things like why you prefer one brand of clothing or a specific restaurant, and how advertising, peer pressure, or personal preferences affect your choices.

Think of it as studying people's habits and choices when they shop or spend money. Businesses use this information to figure out what their customers like and how they can improve their products to meet those preferences. Understanding consumer behavior helps companies create better products, improve customer satisfaction, and increase sales.

In short, consumer behavior focuses on understanding why people buy what they buy!

Introduction of Marketing Mix

The marketing mix refers to a combination of factors that a company uses to promote its products or services and meet customer needs. It’s like a recipe with key ingredients that businesses adjust to make their product attractive to buyers. These key ingredients are often called the 4 Ps:

1. Product: What are you selling? It could be a physical product or a service. The product should satisfy a customer’s need or desire.
2. Price: How much does the product cost? This is what the customer pays, and it has to be reasonable and competitive compared to similar products.
3. Place: Where will the product be sold? This involves choosing the right locations (physical stores or online) where your customers can easily find and buy the product.
4. Promotion: How do you tell people about the product? This includes advertising, social media, and any other methods used to spread the word and convince people to buy.

Together, these 4 elements help businesses plan how to sell their products in the best way possible to attract customers.

Introduction of Consumer Goals

Consumer Goals refer to the specific objectives or desires that people have when they make decisions about buying products or services. These goals guide their behavior and choices.

In simple terms: a consumer goal refers to what a person wants to achieve by purchasing or using a product or service.

When you go shopping, you have something in mind that you want to achieve. Maybe you're buying groceries to stay healthy, or you're purchasing a new phone to stay connected with friends. These reasons or outcomes you're aiming for are called your "consumer goals."

These goals can be:

• Practical (like buying food to satisfy hunger).
• Emotional (like buying a gift to make someone happy).
• Long-term (like saving up for a car).

Consumer goals help businesses understand what people want and how they can meet those desires through their products or services.

Types of Consumer Goals

• Functional Goals: These are practical needs. For instance, buying a laptop because you need it for work or school. The main goal here is to solve a problem or complete a task.
• Emotional Goals: These involve feelings and personal satisfaction. For example, buying a luxury watch might make you feel confident or special. Here, the goal is to fulfill an emotional desire.
• Social Goals: Sometimes, we buy things because of how they make us look to others or how we want to fit into a group. For instance, buying a trendy outfit to look fashionable in social settings is driven by a social goal.
• Long-term Goals: These are goals that people work towards over a longer period. For example, someone might invest in a fitness tracker to maintain their health over time. The focus here is on future benefits.

Why are Consumer Goals Important?

• For Consumers: Knowing your goals helps you make better decisions and spend money wisely. If you know what you want, you can avoid impulse buying or wasting money on things that don't match your needs.
• For Businesses: Understanding consumer goals allows companies to create products or services that truly meet their customers' needs. They can tailor their marketing to show how their product helps people achieve their goals.
• Understanding Needs: Every consumer has specific goals when shopping. It could be buying food to stay healthy, purchasing a new phone for better performance, or getting a luxury item to feel good. Marketers study these goals to know what people are looking for.
• Creating Solutions: Once businesses understand consumer goals, they create products or services that match those goals. For example, if the goal is convenience, a business might offer a home delivery service. If it’s about saving money, they might offer discounts or affordable options.
• Targeted Advertising: Marketers use knowledge of consumer goals to create ads that connect with what consumers want. For example: If someone’s goal is fitness, ads might show how a product helps them stay healthy. If someone’s goal is looking good in social settings, the marketing might focus on style or social status.
• Building Trust and Loyalty: When companies consistently meet consumer goals, customers trust them and often become repeat buyers. If a customer buys a phone that perfectly fits their goal of staying connected, they’re likely to return to the same brand for their next purchase.

Consumer Decision-Making Process

The Consumer Decision-Making Process is the steps people go through before they decide to buy something. It's like a journey from realizing they need something to actually buying it and thinking about whether they're happy with their choice.

Here’s the process in simple terms:

1. Need Recognition (Realizing you want something): This is the starting point where a person realizes they have a need or problem that needs solving. For example, if your phone is broken, you realize you need a new one. This step is like having a lightbulb moment: "I need to buy something.
2. "Information Search (Looking for options): Once you know what you need, you start looking for information on how to fulfill that need. You might: Ask friends for recommendations. Search online for product reviews. Visit stores to compare products. For example, if you need a new phone, you might check websites, watch videos, or ask friends which phone is the best.
3. Evaluation of Alternatives (Comparing choices): After gathering information, you compare different products or brands. You weigh the pros and cons of each option based on things like price, features, or reviews. For example, you might compare different phone brands based on camera quality, battery life, and price to decide which one fits your needs best.
4. Purchase Decision (Making the choice); At this stage, you’ve evaluated your options and made your decision. You go ahead and buy the product you’ve chosen. This is the moment when you take action—whether it’s purchasing online, going to the store, or calling up a service provider.
5. Post-Purchase Behavior (Thinking about the decision afterward): After buying the product, you reflect on whether you’re happy with your choice. If the product meets or exceeds your expectations, you’ll feel satisfied. If not, you might regret your decision or think about returning the product. For example, if the new phone works great and you love it, you feel good about your decision. But if it doesn’t meet your expectations, you might feel disappointed and reconsider the brand for future purchases.

Example: Let’s say you want to buy a laptop:

• Need Recognition: You realize your current laptop is too slow, and you need a new one.
• Information Search: You read reviews, watch YouTube videos, and ask friends about the best laptops for your needs.
• Evaluation of Alternatives: You compare different models, looking at factors like price, speed, and battery life.
• Purchase Decision: You decide to buy the laptop that offers the best balance of features and price.
• Post-Purchase Behavior: After using it for a week, you’re happy with its performance and feel you made the right choice.

In short, the Consumer Decision-Making Process helps explain how and why people make choices when buying things, starting from recognizing a need to reflecting on whether they’re happy with the purchase.

Need Recognition

Need Recognition is when a person realizes they have a problem or desire that can be solved by buying something. It's the first step in the buying process, where the thought "I need this!" pops into their mind. This could be triggered by a basic need (like hunger) or a want (like upgrading to a new phone).

Something triggers it: There’s usually a reason that makes you realize you need something. It could be that something is broken, you’ve run out of a product, or you see something new that you want. For example, if your old shoes are worn out, you suddenly realize, "I need new shoes.

Types of Needs

• Basic needs: These are essential things, like food or water. If you’re hungry, you recognize that you need to buy food.
• Wants or desires: These are things you don’t need to survive but might want for comfort, status, or fun. For example, you might want the latest smartphone because it has cool features, even if your old phone still works.

Search for information

Search for Information is the step where, after realizing you need something, you start looking for details about what to buy or how to solve the problem. It’s like doing your homework before making a purchase.

In simple terms, it's when you gather facts, compare options, and try to find the best product or service that meets your needs.

How it Works

Where do you look?  You might: Ask friends or family for advice. Check online reviews or product comparisons. Visit stores or websites to see options and prices. 

Why do you search? To make sure you’re getting the best value, and the right features, or just to avoid wasting money on something that won’t work.

Example: If you need a new phone, you might: Google “best phones under $500.”Watch YouTube videos that review different models. Ask your friends which phones they like and why.

Pre-Purchase Evaluation of Alternatives

Pre-Purchase Evaluation of Alternatives is the step where you compare different options before deciding what to buy. After gathering information, you look at the pros and cons of each choice to see which one best meets your needs.

Example: You want to buy a new laptop and find three options:

• Laptop A: $600, good battery life, lightweight.
• Laptop B: $800, powerful for gaming but heavy.
• Laptop C: $700, balanced performance, good battery life, lightweight.

You compare their prices, features, and reviews. After evaluating, you decide that Laptop C is the best choice for your needs because it offers a good balance of performance and portability.

In short: You think about factors like price, quality, and features to decide between different products. This helps you make a smart choice before making a purchase.

Purchase

Purchase is the step where you finally decide to buy a product or service. After evaluating your options and finding the best one for your needs, you take action to make the purchase. This can involve:

• Paying for the item in a store or online.
• Completing the order process and confirming your choice.

In short: The purchase is when you buy what you've decided on, marking the end of the decision-making process.

Consumption

Consumption is the step where you actually use or experience the product or service you bought. It’s the moment when you enjoy the benefits of your purchase.

In short, Consumption is when you use or experience the product or service you bought. For example, after buying a new smartphone, you start using it to make calls, browse the internet, and take photos. It’s about getting value and enjoyment from your purchase.

Post-Consumption Evaluation

Post-Consumption Evaluation is the step where you think about whether you’re satisfied with what you bought after using it. You reflect on whether the product or service met your expectations.

In short, Post-Consumption Evaluation is about reflecting on your satisfaction after using a product.

Example: After using your new smartphone for a month, you might consider: Did it work well? Is it easy to use? Are you happy with the battery life and features?

If you’re satisfied, you might feel good about your purchase. If not, you might regret buying it.

Divestment

Divestment is the process of getting rid of a product you no longer want or need. This could involve selling, donating, or recycling the item. 

In short, Divestment is when you decide to get rid of a product you don’t want anymore, like selling or donating it.

Example: If you decide your smartphone isn’t working well for you anymore, you might sell it online or give it to a friend who needs a phone

Interrupts in the Buying Process & its Effects

Interrupts in the Buying Process are events or factors that disrupt your decision-making when you're trying to buy something. They can happen at any stage, making you rethink or delay your purchase.

Types of Interrupts:

• External Interrupts: Things outside of you, like price changes, ads from competitors, or suggestions from friends.
• Internal Interrupts: Feelings or thoughts that affect you, like stress, confusion from too many choices, or changing your mind about what you want.

Effects of Interrupts

• Delays: You might take longer to make a decision.
• Abandonment: You could decide not to buy anything at all.
• Reevaluation: You might change your mind about what you want or need.
• Dissatisfaction: You could end up feeling unhappy with your final choice if the process was too interrupted.

Example: Suppose you want to buy a new phone:

• Need Recognition: Your old phone is broken.
• Interrupt: While researching, you see a friend's post about a sale on a different brand (external interrupt).
• Effect: You feel unsure and decide to wait instead of buying right away (delay or abandonment).

In short, interrupts can slow down or change your buying process, affecting whether or not you make a purchase.

Customer Involvement

Customer Involvement refers to how much a customer cares about or is engaged in the buying process for a particular product or service. It varies based on the type of purchase.

Types of Customer Involvement:

• High Involvement: This occurs when the purchase is significant, expensive, or involves a lot of personal importance. Customers spend more time researching and considering their options. Example: Buying a car. Since it’s a major expense, you might compare different models, read reviews, and test-drive several options before making a decision. 
• Low Involvement: This happens when the purchase is relatively inexpensive, routine, or less important. Customers tend to make quick decisions without much thought. Example: Buying a pack of gum. You might just grab it without much consideration since it’s a low-cost item.

In Short: Customer involvement is about how much effort and thought a customer puts into a purchase. High involvement means more research and careful consideration, while low involvement leads to quicker, less thoughtful decisions.

Consumer Journey through the World of Technology

The Consumer Journey through the World of Technology refers to how people navigate their buying experience in today’s tech-driven environment. This journey includes various stages, from realizing a need to making a purchase and using the product, all influenced by technology.

Stages of the Consumer Journey

1. Awareness: Consumers first realize they need something. This can be triggered by seeing ads, recommendations, or social media posts. Consumers often become aware of their needs through digital marketing, social media ads, influencer promotions, or online content. Example: You see an advertisement for a new fitness tracker on Instagram, and you think, “I could use that to help with my workouts.”

2. Research: Once aware of the need, consumers look for more information. They might search online, read reviews, or watch videos. They use search engines, product reviews, comparison websites, and social media to gather information. Example: You Google “best fitness trackers” and read reviews on tech websites and watch YouTube videos comparing different models.

3. Consideration: Consumers compare different options based on their research. They look at features, prices, and customer feedback. Technology facilitates comparison shopping through online platforms that allow side-by-side evaluations of features, prices, and user ratings. Example: You create a list of fitness trackers that fit your budget and compare their features, like heart rate monitoring, battery life, and waterproofing.

4. Decision: After evaluating options, consumers decide which product to buy. Technology often helps streamline this process, like easy online checkouts or in-app purchases. E-commerce platforms provide streamlined checkout processes, payment options, and promotions that can influence decision-making. Example: You choose a specific fitness tracker and buy it online through an app because it offers a discount and free shipping.

5. Purchase: This is the actual buying step. Consumers complete their purchase and receive their product. Consumers can purchase items online or through apps, often with easy payment methods and fast delivery options. Example: You place your order for the fitness tracker and receive a confirmation email with delivery details.

6. Post-Purchase Evaluation: After using the product, consumers assess whether it meets their expectations. They may leave reviews or share their experiences online. Customers may leave reviews, share experiences on social media, or provide feedback through surveys. Example: Once you start using the fitness tracker, you evaluate its performance and might post a review on social media or a shopping site saying how it helps you track your workouts.

Example: Let’s say you want a new smartphone:

• Awareness: You see ads for the latest models on social media.
• Research: You read online reviews and compare specs on tech blogs.
• Consideration: You narrow it down to two models based on features and prices.
• Decision: You decide to buy the model that offers the best camera and battery life.
• Purchase: You order it online and receive it a few days later.
• Post-Purchase Evaluation: After using it for a week, you share your thoughts on social media, praising its camera quality.

In Short: The Consumer Journey through the World of Technology involves several stages that consumers go through when buying a product, heavily influenced by technology. From becoming aware of a need to making a purchase and sharing their experiences, technology plays a crucial role in shaping each part of this journey.

Overall Impact of Technology

• Accessibility: Technology makes information and products more accessible to consumers, allowing for informed decision-making.
• Engagement: Social media and online communities create engagement opportunities where consumers can interact with brands and other users.
• Convenience: E-commerce platforms provide a convenient shopping experience, allowing consumers to buy from anywhere at any time.
• Feedback Loop: Technology enables consumers to give and receive feedback, influencing future purchases for themselves and others.

Unit 2: Consumers as individuals and in the social context