CONSUMER

BEHAVIOUR
 INTRODUCTION
• The marketing mix strategies of a marketer spin around various queries regarding
consumer behavior, like
what type of product consumer purchases in general;
what factors persuade him to buy a good;
why does he buy a specific brand from a particular shop;
why does he shift his preferences from one brand to another or from one store to
another;
what is his reaction to a new product introduced in the market and through which
stages he passes before making a decision to purchase a product.
 INTRODUCTION
• The knowledge of the consumers’ demographic profile and buying habits is
very essential for the marketers to make their marketing plans for achieving
sales targets.
• From the behavior which consumers displays in searching for, purchasing,
using, evaluating, and disposing of products and services, marketers get idea
to satisfy their needs.
 Constituents of consumer Behaviour:

• Consumer behavior encompasses two constituents, namely

• consumer and buyer.
 Consumer

"Consumer" and "Customer" the interchangeably used terms are different in meaning.
• The term "consumer" is used to represent a situation where a product can be
consumed, and "customer" is used to deal with situation where the product is
purchased and may not be directly consumed.
• For instance consumers of items like food, drugs, etc. but customers of garments,
consumer durables, cars, etc.
a) Individual consumer is the person who buys goods and services etc. for
personal or household use.
b) Organizational/Business/Industrial Consumer is the person who buys
goods and services etc. for processing them for the ultimate users including
personal/individual consumers.
For example, if the purpose is to use furniture for self and family, one acts as
an individual consumer. But if furniture is purchased by the office, it is
This Photo by Unknown Author is licensed under CC BY

organizational purchase.
This Photo by Unknown Author is licensed under CC BY
 Buyer/User
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 DEFINITION OF CONSUMER BEHAVIOUR
• According to Schiffman and Kanuk consumer behaviour is defined as “the study
of how individuals make decisions to spend their available resources (time,
money, effort) on consumption-related items. It includes the study of ‘what
they buy’, ‘why they buy’, ‘when they buy’, ‘where they buy’, ‘how often they
buy it’ and ‘how often they use it."
• This definition is quite comprehensive because it starts before actual buying and
goes even after purchase of the product.
• The goal of studying consumer behaviour is to satisfy their needs, while utilizing
their time, money, and effort in best possible way.
 Importance of studying Consumer Behavior
1. Knowledge of consumer behavior helps to determine the marketing mix-
The management keeps on exploring –
what type of product consumer purchases in general;
what factors persuade him to buy a good;
why does he buy a specific brand from a particular shop;
why does he shift his preferences from one brand to another or from one store to
another or
what is his reaction to a new product introduced in the market.
These facts give signals to producers about marketing mix to be arranged for their
product and to serve consumers in better manner.
 Importance of studying Consumer Behavior
2. To assess consumer’s actions or reactions-
The consumer seeks value for money.
He wants to pay fewer prices, but expects superior features in the product.
This has led many marketers to introduce quality products at prices which are
affordable to the customers.
 Importance of studying Consumer Behavior
3. To meet diversified consumer preferences –
With globalization customers got more availability of more choices compared to pre-
1991 era.
For example, the customer now has many brands of cars to choose from like Hyundai,
Honda, Mercedes, BMW etc

4.A guide to planning and implementing marketing strategies –

Knowledge of consumer behaviour can serve as a great help to formulate and
implement marketing strategies to achieve goals of the firm.
 Importance of studying Consumer Behavior
5. To address special needs, personalities, and lifestyles of consumers-
Consumer prefer differentiated products to reflect their special needs, personalities, and
lifestyles.
The study of consumer behavior helps to satisfy such special needs.
For example, when Onida 21 was introduced, it was advertised on the television ‘for
the elite classes.’ Similarly Maggi introduced their ketchups with emphasis on "It's
different"
 Importance of studying Consumer Behavior
6. To identify market segmentation.
This also helps to classify market segments to market the products effectively.
For example LIC provides its insurance cover to suit the needs of different types of
customers-
Jeevan Suraksha (Financial security and post-retirement benefits),
Asha Deep II (Medical covers),
Jeevan Shree (to retain key individuals in the organisation),
Jeevan Surabhi (Money back with rising insurance cover),
Jeevan Mitra (double benefit endowment plan),
Money Back (for periodic cash flows), and
Bima Kiran (for low-cost, high insurance cover).
 Importance of studying Consumer
Behavior
7. To remain updated with technological advancement and bring new
products to the market at faster pace-
Studying consumer behavior is imperative to get to know consumers’
expectations and address them quickly.
Thus, identification of target market before production is essential to deliver
the desired consumer satisfaction and delight by bringing product to the market
at faster pace.
 Factors affecting Consumer Buying Behavior:
1. Cultural Factors:
• Culture is a combination of values and beliefs, religions and customs, which
influence consumer behaviour directly or indirectly.
• In a society, the cultural study can be made by over viewing religion, customs,
language, traditional arts, work-patterns of people.
• Culture is prescriptive, socially shared, facilitator of communication, subjective,
cumulative and dynamic.
• The thinking patterns are passed from generation to generation.
• These factors make an important basis for market segmentation, product
development, advertising, etc. CONT
 Factors affecting Consumer Buying Behavior:
• The consumption habits, eating habits, food-preferences, etc. signal the producers
about what should be produced and supplied in the market.
• For example, in India, beef preparations are generally not found on the menu cards
of most restaurants and food chains, as Hindus do not eat beef.
• Similarly a sub-culture consisting of psychological, social or geographical source of
consumer group indicates their unique demand-pattern in consumption-behaviour.
• For example, in north India, people prefer wheat- chapati as staple food whereas in
the south, people prefer rice.
• In any society, social class of individuals and families with similar values, interests
and behavior creates almost identical demand patterns.
 Factors affecting Consumer Buying
Behavior:
2.Social Factors:
Social factors like family and reference groups also play significant role in determining consumer behavior in the
following manner.
➢ Family
➢ Reference groups
➢ Role and status
➢ Age and life cycle stage
➢ Education and Occupation
➢ Economic condition
➢ Life style
 Factors affecting Consumer Buying
(a) Family
Behavior:
• Consumer buying decisions are influenced by many social factors like the economic
condition of the family, its role and status in society, and the reference group of
people.
• People with high incomes have a high purchasing power and are status-conscious.
• They generally purchase branded products from malls and expensive markets.
• On the contrary, the ordinary people, belonging to middle or lower income groups
purchase products from local markets.
• Similarly, the urban population's buying behaviour will be different from the rural-
population's buying behaviour, as they have greater exposure and choices.
 Factors affecting Consumer Buying Behavior:
(b)Reference Groups
• A reference group comprises of two or more persons realizing common goals, group values,
attitudes and behaviour.
• Friends or other people with whom one identifies himself constitute a reference group.
• While making purchases, such reference groups play a vital role as recommendations are
made by the group- members, who may also become a source of information.
• Marketers, sometimes, use the ‘reference group-influence’ by suggesting in advertisements
that a specific reference group buys this particular brand of products and is highly satisfied.
• For example: Amway products, Patanjali products are promoted by organic product users.
The group member who provides information about a specific sphere that interests
members of a group is called an opinion-leader.
• The opinion-leader can exert maximum influence when consumers have high-product
involvement but low product knowledge.
 Factors affecting Consumer Buying Behavior:
( c) Roles and Status:
• An individual has many roles to play in their lives; at their workplace, they have
different duties as compared to the duties they are expected to fulfill at home.
• Roles and status help marketers to prepare their products and market them not only
as per the customer's requirements, but keeping in view the status those individuals
enjoy, so that the customers are targeted at the right place.
• For example, fully automatic washing machines are beneficial for a working woman,
and are advertised accordingly.
 Factors affecting Consumer Buying
Behavior:
(d) Age and life-cycle stage
• This is an important determinant of the goods demanded by a consumer.
• If the consumer is young, he/she will demand more of trendy clothes,
recreational facilities like gyms and spas, grooming products such as
deodorants, cosmetics, etc.
• Elderly consumers will demand more of medicines, healthy-foods walking
sticks, health-care facilities etc.
 Factors affecting Consumer Buying
Behavior:
• (e) Education and Occupation
• The level of education and occupation of the consumer also decides his/her
consumption behaviour.
• For example, a business executive may go for expensive business suits,
electronics like laptops and smart phones, or memberships of clubs, whereas
a clerk will buy simple clothes and ordinary, cheaper goods.
 Factors affecting Consumer Buying
• (f) Economic conditions
•
Behavior:
People in the high income bracket have higher purchasing power. They buy
expensive and trendy goods. On the contrary, people in the low-income groups buy
simple and relatively cheaper goods.
• (g) Lifestyle
• Lifestyles are identified by observing activities, interests, opinions, and demographics.
• The activities of individuals like work, hobbies, vacations, social activities and
community service, shopping, sports etc. indicate a lot. People's interests can be
observed from their preferences of food, fashion, recreation, media choice etc.
Factors affecting Consumer Buying Behavior:

3. Psychological Factors
(a) Motivation
(b) Perception
(c) Learning
(d) Beliefs and attitudes
(e) Personality
 Factors affecting Consumer Buying Behavior
(a) Motivation
• A need becomes a motive when it is aroused to a sufficient level of intensity and a
motive is a need that is sufficiently pressing to drive the person to act.
• Thus, motivation drives the consumers to develop a purchasing attitude. It works at a
subconscious level and is often difficult to measure.
• For example a buyer goes to a nearby restaurant and orders pizza for herself,
because hunger was the motivating factor for her to purchase pizza.
• Recognition and self-esteem also influence the buying decision of individuals.
• Individuals prefer to spend on premium brands and unique merchandise for others
to look up to them.
• Certain products become their status symbol and people know them by their choice
of picking up exclusive products.
 Factors affecting Consumer Buying Behavior:
b) Perception
• What a person thinks about a particular product or service is his/her perception
towards it.
• For someone a Dell Laptop might be the best laptop while for others it could be just
one of the best brands available.
• Thus, we understand that individuals with the same needs might not purchase similar
products due to difference in perception.
• Individuals, even, perceive similar situation differently due to difference in the way
they interpret information.
 Factors affecting Consumer Buying
Behavior:
(c) Learning
• Learning comes only through experience.
• An individual comes to know about a product and service only after he/she
uses the same.
• An individual who is satisfied with a particular product/service will show a
strong inclination towards buying the same product again.
 Factors
(d)Beliefs and Attitudes
affecting Consumer Buying
Behavior:
• Beliefs and attitude play an essential role in influencing the buying decision of
consumers.
• Individuals create a certain image of every product or service available in the market.
• Every brand has an image attached to it, also called its brand image.
• Consumers purchase products/services based on their opinions which they form
towards a particular product or service.
• A product might be really good but if the consumer feels it is useless, he would
never buy it.
 Factors affecting Consumer Buying
(e)Personality
Behavior:
• Personality is the collection of inner psychological attributes that characterize the
outer behavior an individual in terms of individual differences.
• Personality traits like dominance, self-confidence, sociability or adaptability of a
person influence his decision making up to great extent whereas an individual’s
personality may change gradually but plays a vital role in his buying and consumption
behaviour.
• Thus to conclude, we can say that consumer behavior is an outcome of numerous
cultural, social and psychological factors.
 DIFFERENT BUYING ROLES
• INITIATOR
• INFLUENCER
• GATE KEEPER
• DECIDER
• BUYER
• USER
• PREPARER
• MAINTAINER
• DISPOSER
 DIFFERENT BUYING ROLES
• Initiator:
The initiator is a person who first gets the thought or gives the suggestion/idea of
buying the particular product.
A child might play the role of an initiator in the purchase process of a chocolate.
• Influencer:
The influencer is a person who directly or indirectly has some influence on the final
buying decision of others.
The parents play the role of influencers in the purchase process of a chocolate.
 DIFFERENT BUYING ROLES
• Gatekeeper: The gatekeeper is a person who permits the flow of certain
information and restricts flow of some set of information.
Parents play the role of a gatekeeper in the selection of movies for children.
• Decider: The decider is a person who finally determines part or the whole of the
buying decision, ie. all quantity like whether to buy, what to buy, how to buy, when to
buy or where to buy are considered. In the event of buying baby products, the
mother plays the role of the decider.
 DIFFERENT BUYING ROLES
• Buyer: The buyer is the person who actually purchases and pays for the
purchase.
In a typical family decision making process, father plays the role of the
buyer who is involved in the economic transaction process.
• User: The user is the person who actually uses or consumes the services or
products.
In most of the grocery product purchase, the entire family uses the product. In
a typical purchase of washing machine, the housewife plays the role of user.
 DIFFERENT BUYING ROLES
• Preparer: The preparer is the person who changes the product to usable form for
consumption.
For example, in a typical family consumption of food items, mother plays the role
of preparer.
• Maintainer: Members who service or repair the product so that it will provide
continued satisfaction is a maintainer.
• Disposer: The disposer is the person who finally disposes the package of the
product.
For example mother plays the role of a disposer after the product is consumed by
the family.
• ACTIVITY:
Prepare a list of ten products where the child plays an important role in the
buying process
 THE CONSUMER DECISION PROCESS
• Consumers undertake a step-by-step process while purchase a decision.
• The amount of time and effort they devote to a particular purchasing decision
depends on the necessity of the desired good or service to the consumer.
• Purchases where high levels of social or economic issues are said to be associated are
the high-involvement purchase decisions.
• Routine purchases that have little risk to the consumer are low-involvement
decisions.
• Consumers generally spend more time and effort to make purchase decisions for
high- involvement products than to those for low-involvement products.
 THE CONSUMER DECISION PROCESS
• Fox example, a person purchasing air conditioner/refrigerator will probably compare
prices, visit dealer showrooms, read online reviews and ask for advice from friends
before making the final decision.
• People might not invest huge effort in choosing between two brands of chocolates.
• They will also go through the steps of the consumer decision process but on a
smaller scale.
• Purchase decisions can be thought-based (cognitive) or feeling based (emotive).
• It is observed that both cognition and emotion affect every purchase decision with
either one of them dominating the decision at a given point of time.
Classification of Consumer Purchase Decisions

Thought-based Feeling-based
Example: Example:
Buying a home Jewellery
Buying a car Snacks
 THE CONSUMER DECISION PROCESS

• Problem recognition (Need identification)

• Information Search
• Evaluation of Alternatives
• Purchase Decision and Action
• Post-Purchase Evaluation
 THE CONSUMER DECISION PROCESS
1. Problem Recognition –
During the first stage of the consumer decision making process, the consumer
becomes aware of the difference between the actual state (where we are now) and the
ideal state (‘where we want to be’).
This stage motivates the individual to achieve the desired state of affairs. Here they
may also play a role through creating a new ideal state or by increasing dissatisfaction
with the actual state.
 THE CONSUMER DECISION PROCESS
2. Information Search –
• In the second stage, the consumer gathers information related to his/her fulfillment
of a desired state of affairs.
• This search identifies alternative means of problem solution.
• High- involvement purchases may invite large information searches, while low-
involvement purchases require little search activity.
• The search may include internal or external sources of information.
• During the internal search existing information feelings and experiences similar to
the problem solving situation are recalled from the consumer’s memory.
 THE CONSUMER DECISION PROCESS
• An external search collects information from outside sources, which may include
family members, friends, store displays, sales personal, advertisements and product
reviews.
• The external search may be a general ongoing search or a specific pre-purchase
search.
• The search identifies the other existing brands for consideration and possible
purchase.
• The number of brands that a consumer actually considers in making a purchase
decision is known as the evoked set.
• Marketers seek to influence consumer decisions during the process of search by
providing persuasive information about their goods or services in a format useful to
consumers.
 THE CONSUMER DECISION PROCESS
• 3. Evaluation of Alternatives-
• The third step in the consumer decision making process is to evaluate the evoked set
of options identified during the search step.
• The result of the evaluation stage helps in choosing a brand or product in the
evoked set or might also result in a decision to start search for additional alternatives,
when all those which were identified during the initial search seem to be
unsatisfactory.
• To complete this analysis, the consumers develop a set of evaluation criteria to guide
the selection.
• These criteria can either be objective facts or subjective impressions.
THE CONSUMER DECISION PROCESS

• Marketers can attempt to influence the outcome from this stage in numerous
ways.
• Initially, they can try and educate consumers about attributes that they view
as important in evaluating a particular class of goods.
• They can also identify which criteria evaluate are important to an individual
and attempt to show why a specific brand fulfills those criteria.
• They can try to help a customer in expanding his/her evoked set to include
the product they are offering.
THE CONSUMER DECISION PROCESS

• 4. Purchase Decision and Action

• The search and alternative evaluation stages of the decision process result in
the final purchase decision and the act of making the purchase.
• At this stage, the consumer has evaluated each alternative in the evoked set
based on his/her personal set of evaluative criteria and lowered the
alternatives down to one.
• Marketers can smooth the purchase decision and action by helping
consumers through providing finance, delivery, and installation and so on.
 THE CONSUMER DECISION PROCESS
5. Post-Purchase Evaluation- The purchase act might result in one of two:

• Satisfaction – The buyer feels satisfied at the reduction of the gap between the
actual and the ideal states or might experience dissatisfaction with the purchase.
Consumers are generally satisfied if purchases meet with their expectations.

• Dissatisfaction – Sometimes, however, consumers experience some post purchase

anxieties, called cognitive dissonance. It is a thought that one has not made the
right decision. The consumer attempts to reduce this anxiety by searching for
additional information that supports his/her choice. The marketer can help by
providing supportive information to the buyer and also by positive marketing
communications.