CONSUMER BEHAVIOR ( PRELIM )

CONSUMER - Is a person who decides on the purchase of a good or a service for personal use, based on personal
preferences, beliefs and needs or the influence of advertising.

CONSUMER BEHAVIOR:

ACTIONS AND DECISION PROCESSES of people who purchase goods and services for personal consumption.

PHYSICAL ACTIVITY AND DECISION PROCESS which individuals engage in evaluating, acquiring, using or disposing of

goods and services.

What is Consumer Behavior?

The study of how consumers

 Select
 Purchase
 Use
 Dispose

of goods and services in the process of satisfying their personal and household needs and wants.

WHAT IS CONSUMER BEHAVIOR?

The roles also vary in different consumption situations; for example a mother plays the role of an influencer in a child’s
purchase process, whereas she plays the role of a disposer for the products consumed by the family.

NATURE OF CONSUMER BEHAVIOR

1.Influence by various factors

Marketing Factors - such as product design, price, promotion, packaging, positioning and distribution.

Personal Factors - such as age, gender, education and income level.

Psychological Factors - such as buying motives, perception of the product and attitudes towards the product.

Situational Factors - such as physical surroundings at the time of purchase; social surroundings and time factor.

Social Factors - such as social status, reference groups and family.

Cultural Factors - such as religion, social class----caste and sub-castes.

2.Undergoes a constant change - behavior undergoes a constant change consumer behavior is not static it undergoes a
change over a period of time depending of the nature of the product.

3.Various from consumers to consumer - All consumers do not behave in the same manner. Different consumers behave
differently. The differences in consumer behavior are due to individual factors such as the nature of the consumers,
lifestyle and culture.

4.Varies from region and country to country - The consumer behavior varies across states, regions and countries.

5.Information are important to the marketer. - need to have a good knowledge of the customer behavior. They need to
study the factors that influence the customer behavior of their target customers.
6. Leads to purchase decision - A positive consumer behavior leads to a purchase decision. A consumer may take the
decision of buying a product on the basis of different buying motives.

7. Varies from product to product - is different for different products. There are some customers who may buy more
quantity of certain items and very low or no quantity for other items.

8. Improves standard of living - The buying behavior of the consumers may lead to higher standard of living. The more a
person buys the goods and services, the higher is the standard of living.

9. Reflects status - The consumer behavior is not only influences by the status of a consumer, but it also reflects it.

The Interdisciplinary Roots of Consumer Behavior:

MODERN PHILOSOPHY - It concerns with modern marketing philosophy ---identify consumers needs and satisfy them
more effectively than competitors. It makes marketing consumer-oriented the key to succeed.

ACHIEVEMENT OF GOALS - The key of a business any type of business or company is survival, profitability, and growth in
highly competitive marketing environment is its the ability to identify and satisfy unfulfilled consumer needs better and
sooner than the competitors.

USEFUL FOR DEALERS AND SALESMAN - The study of Consumer Behavior is not useful for the company alone.

MORE RELEVANT MARKETING PROGRAMME - Marketing program consisting of product, price, promotion and
distribution decisions, can be prepared more objectively.

ADJUSTING MARKETING PROGRAMME OVER TIME - Consumer behavior studies the consumer response pattern on a
continuous basis.

PREDICTING MARKETING TREND - Consumer behavior can also aid in projecting the future market trends.

CREATION AND RETENTION OF CONSUMERS - Marketers who base their offerings on a recognition of consumer needs to
find a ready market for their products.

COMPETITION - Consumer behavior study assists in facing competition, too. Based on consumers’ expectations, more
competitive advantages can be offered. It is useful in improving competitive strengths of the company.

DEVELOPING NEW PRODUCTS - New product is developed in respect of needs and wants of the target market. In order to
develop the best fit product, a marketer must know adequately about the market.

CONSUMER DIFFERENTIATION - Market exhibits considerable differentiations. Each segment needs and wants different
products. For every segment, a separate marketing program is needed.

DYNAMIC NATURE OF THE MARKET - Consumer behavior focusses on dynamic nature of the market. It helps the
manager to be dynamic, alert, and active in satisfying consumers better and sooner than competitors.

EFFECTIVE USE OF PRODUCTIVE RESOURCES - The study of consumer behavior assists the managers to make the
organizational efforts consumer-oriented.

What is the Consumer Research Process?

Customer research is conducted so as to identify customer segments, needs, and behaviors. It can be carried out as part
of market research, user research, or design research.
STEPS IN CUSTOMER RESEARCH PROCESS

 Set your objectives

 Plan your research
 Collect and Collate your Findings
 Analyze and Understand your Research
 List and Group your Information
 Develop Conclusions and Recommendations about your Research
 Consumer Behavior in a World of Economic Instability

Consumer Behavior in a World of Economic Instability

Internal factors: earnings, demographics, social and cultural

External factors: external motivators to result in a change in the consumer's behavior.

Determinants of Consumer Behaviour

1. Economic Factors - As per economists, consumer is a rational person.

2. Socio Cultural Factors - individual consumer's behavior is affected by group of individuals known as reference
groups, opinion leaders and family.
3. Psychological Factors - motivation, perception, learning, attitude and personality are the major psychological
factors, internal to the individual, that affect the behavior of an individual as consumer.

Motivation- is a driving force within individuals that impels them to some action.

Buying motive - is an urge prompting a person to purchase decision.

Perception - is a process whereby stimuli are received by an individual, interpreted by him and translated into a
response.

Learning process - involves the interplay of drive, cues, response and/ or reinforcement.

Drive - is a strong internal stimulus impelling action. Involves the interplay of drive, cues, response and/ or
reinforcement.

Cues are external stimuli coming from market or social environment of consumer e.g. product or

advertisement. Reaction to cue or drive constitutes response.

Reinforcement increases the possibility of similar response in future i.e. repeat purchases.

Attitude - is a state of mind, a learned predisposition to respond in a favourable or unfavourable way to an object.

Personality - refers to an individual's inner psychological characteristics that determine and reflect how an individual
responds to his or her own environment.

Consumer decision-making process, explains how consumer takes purchase decisions. It represents a problem-solving
approach followed by consumer and consists of five steps i.e.

 Recognition of need
 Search for information
 Evaluation of alternatives
 Purchase decision and
  Post-purchase evaluation.

External Factors

The are the ones beyond the control of the customers.

They can divide into five sectors:

 Demographic
 Socio-economic
 Technology and public policy
 Culture; sub-culture
 Reference groups; and marketing.

Internal Factors are the personal traits or behaviors which include attitudes,

learning, perception, motivation, and self-image.

 The Functional Motives is related to the consumer needs and include things like time, convenience of shopping
online, price, the environment of shopping place, selection or products etc.
 The Non-Functional Motives related to the culture or social values like the brand of the store or product.