0 9-Q1. What is Consumer Behavior? Why is it important?
Answer:
Consumer Behavior is the study of how individuals, groups, o[-r organizations
select, buy, use, and dispose of goods, services, or ideas to satisfy their needs
and desires. It helps in understanding the psychological, social, and economic
aspects behind consumer decisions.
Importance of Consumer Behavior:
1. Understanding Needs: Helps marketers identify what consumers want.
2. Product Development: Aids in designing products that match customer
expectations.
3. Market Segmentation: Helps divide the market into groups with similar
buying habits.
4. Improved Communication: Enables effective advertising messages that
attract target customers.
5. Customer Retention: Helps companies build long-term relationships
through satisfaction and loyalty.
Example: A company like Apple studies how consumers use technology before
launching new iPhones.
Q2. Describe various factors affecting consumer behavior.
Answer:
Consumer behavior is influenced by multiple internal and external factors.
These can be grouped as follows:
1. Cultural Factors:
o Culture, sub-culture, and social class affect buying habits.
o Example: Festivals in India influence purchase of clothes and
sweets.
2. Social Factors:
o Family, friends, reference groups, and status play major roles.
o Example: A person may buy a phone recommended by peers.
3. Personal Factors:
o Age, income, occupation, lifestyle, and personality influence
purchase.
o Example: Teenagers prefer trendy clothes, while adults prefer
formal wear.
4. Psychological Factors:
o Motivation, perception, learning, beliefs, and attitudes shape
decisions.
o Example: A person motivated to stay fit may buy gym equipment.
These factors together explain why different consumers behave differently in
the same market.
Q3. State and explain buying decision stages.
Answer:
The consumer buying decision process involves five key stages:
1. Need Recognition:
The consumer realizes there is a problem or need.
Example: Feeling hungry → need for food.
2. Information Search:
Consumer looks for information about products or services.
Example: Searching online for best restaurants.
3. Evaluation of Alternatives:
Comparing brands or options available.
Example: Comparing McDonald’s vs. Domino’s for price and quality.
4. Purchase Decision:
The final choice is made and the product is bought.
Example: Choosing McDonald’s meal combo.
5. Post-Purchase Behavior:
After buying, the consumer evaluates satisfaction.
Example: If food was tasty → positive feedback; if not → complaint or
change of brand.
Q4. Discuss the stages involved in consumer buying decision process.
Answer:
The consumer decision-making process follows specific stages that help
marketers understand customer psychology:
1. Problem Recognition: Identifying the need or problem that requires a
purchase.
2. Information Search: Seeking internal (past experience) and external
(friends, ads, internet) information.
3. Evaluation of Alternatives: Comparing features, price, quality, and
benefits of available products.
4. Purchase Decision: Selecting the best option and completing the
purchase.
5. Post-Purchase Evaluation: Assessing satisfaction level; can lead to
repeat purchase or change of brand.
Conclusion: Understanding these stages helps marketers design better
marketing strategies and ensure customer satisfaction.
Q5. Explain how consumer characteristics affect perception.
Answer:
Perception is the process by which individuals select, organize, and interpret
information to create a meaningful picture of the world.
Consumer characteristics affecting perception:
1. Motives: A person’s needs and desires shape what they pay attention to.
Example: A hungry person notices food ads more easily.*
2. Experience and Learning: Past experiences influence how information
is perceived.
Example: A person who had bad service from a brand may ignore its ads
later.*
3. Personality: Optimistic or skeptical personalities interpret messages
differently.
4. Expectations: People see what they expect to see based on beliefs or
assumptions.
5. Culture and Social Influence: Cultural background and group opinions
shape perceptions.
Thus, marketers must design ads and packaging keeping in mind the consumer’s
mindset and experiences.
Q6. Describe the influences that affect or alter brand choices.
Answer:
Consumers often change their brand preferences based on several influencing
factors:
1. Quality and Performance: If product quality drops, consumers switch
brands.
2. Price Sensitivity: Discounts or better value may attract consumers to
new brands.
3. Social Influence: Family and friends can influence brand choice.
4. Advertising and Promotion: Strong promotional campaigns create
brand awareness.
5. Personal Experience: Positive or negative experiences affect loyalty.
6. Availability: Out-of-stock situations can force consumers to choose
another brand.
Example: A loyal Pepsi drinker may shift to Coca-Cola due to better offers or
availability.
Q7. Explain socio-cultural factors in buying behavior.
Answer:
Socio-cultural factors shape an individual’s values, attitudes, and behaviors in
the marketplace.
1. Culture:
o The set of values, traditions, and lifestyles learned by a person.
o Example: Indians buy gold jewelry during festivals.
2. Sub-Culture:
o Smaller cultural groups with shared beliefs (e.g., regional or
religious groups).
o Example: South Indians prefer filter coffee, North Indians prefer
tea.
3. Social Class:
o Based on income, education, and occupation; affects preferences
and spending power.
4. Family Influence:
o Family members play key roles in purchase decisions like cars,
furniture, etc.
5. Reference Groups:
o Friends or colleagues whose opinions affect what we buy.
These factors determine not only what people buy but how and why they buy.
Q8. Explain the relationship between environmental factors and consumer
behavior.
Answer:
Environmental factors refer to external elements that impact a consumer’s
purchasing decisions.
1. Economic Environment:
Income levels, inflation, and employment affect buying power.
2. Technological Environment:
New innovations influence product choices (e.g., smartphones replacing
cameras).
3. Social Environment:
Society’s opinions, values, and social status shape consumption patterns.
4. Cultural Environment:
Local traditions influence product acceptance.
5. Political and Legal Environment:
Laws, government policies, and taxation affect product prices and
availability.
Hence, understanding the environment helps companies design products that
match the changing market needs.
Q9. Distinguish between Industrial Consumer and Domestic Consumer
Basis Industrial Consumer Domestic Consumer
1. Meaning Buys goods for business or Buys goods for personal or
production use. family use.
2. Purpose Purchases for Purchases for satisfying
manufacturing or resale. personal needs.
3. Product Type Raw materials, machinery, Finished goods like food,
and components. clothes, and furniture.
4. Quantity Buys in large or bulk Buys in small quantities.
quantities.
5. Decision Professional and multi- Personal or family-based
Process person decision-making. decisions.
6. Price Highly price-conscious and Brand- and comfort-
Sensitivity cost-focused. oriented.
7. Purchase Regular and planned Occasional and need-
Frequency buying. based buying.
8. Relationship Formal, long-term supplier Informal, short-term retail
with Seller relationship. relationship.
9. After-Sales Needs technical and Limited service like
Service maintenance support. warranty or repair.
10. Example A factory buying steel for A family buying a
production. refrigerator for home use.
Q10. Explain 7 O’s Framework for Consumer Behavioral Analysis.
Answer:
The 7 O’s Framework was developed by Philip Kotler to analyze consumer
behavior systematically. It helps marketers understand seven key questions
about consumers:
O’s Element Explanation
1. Occupants – Who buys? Identifies the target consumers.
2. Objects – What do they buy? The type of products or services
purchased.
3. Objectives – Why do they buy? The reasons or motives behind
purchase.
4. Organizations – Who Family, reference groups, or company
participates in buying? decision-makers.
5. Operations – How do they The process of buying — online, retail,
buy? credit, etc.
6. Occasions – When do they Timing or frequency of purchase
buy? (festivals, weekends, etc.).
7. Outlets – Where do they buy? The place or channel — stores, online,
or direct sales.
