Consumer behaviour in services

Consumer behaviour is the study of how individual customers, groups or

organizations select, buy, use, and dispose ideas, goods, and services to
satisfy their needs and wants. It refers to the actions of the consumers in the
marketplace and the underlying motives for those action.

Nature of Consumer Behaviour:

1. Influenced by various factors:

a. Marketing factors such as product design, price, promotion, packaging,

positioning and distribution.
b. Personal factors such as age, gender, education and income level.
c. Psychological factors such as buying motives, perception of the product
and attitudes towards the product.
d. Situational factors such as physical surroundings at the time of purchase,
social surroundings and time factor.
e. Social factors such as social status, reference groups and family.
f. Cultural factors, such as religion, social class—caste and sub-castes.

2. Undergoes a constant change: Consumer behaviour is not static. It undergoes

a change over a period of time depending on the nature of products. For example,
kids prefer colourful and fancy footwear, but as they grow up as teenagers and
young adults, they prefer trendy footwear, and as middle-aged and senior citizens
they prefer more sober footwear. The change in buying behaviour may take place
due to several other factors such as increase in income level, education level and
marketing factors.

3. Varies from consumer to consumer: All consumers do not behave in the

same manner. Different consumers behave differently. The differences in
consumer behaviour are due to individual factors such as the nature of the
consumers, lifestyle and culture. For example, some consumers are technoholics.
They go on a shopping and spend beyond their means.
They borrow money from friends, relatives, banks, and at times even adopt
unethical means to spend on shopping of advance technologies. But there are
other consumers who, despite having surplus money, do not go even for the
regular purchases and avoid use and purchase of advance technologies.

4. Varies from region to region and country to county: The consumer

behaviour varies across states, regions and countries. For example, the behaviour
of the urban consumers is different from that of the rural consumers. A good
number of rural consumers are conservative in their buying behaviours.
 The rich rural consumers may think twice to spend on luxuries despite
having sufficient funds, whereas the urban consumers may even take bank loans
to buy luxury items such as cars and household appliances. The consumer
behaviour may also varies across the states, regions and countries. It may differ
depending on the upbringing, lifestyles and level of development.

5. Information on consumer behaviour is important to the marketers:

Marketers need to have a good knowledge of the consumer behaviour. They need
to study the various factors that influence the consumer behaviour of their target
customers.

6. Leads to purchase decision: A positive consumer behaviour leads to a

purchase decision. A consumer may take the decision of buying a product on the
basis of different buying motives. The purchase decision leads to higher demand,
and the sales of the marketers increase. Therefore, marketers need to influence
consumer behaviour to increase their purchases.

7. Varies from product to product: Consumer behaviour is different for

different products. There are some consumers who may buy more quantity of
certain items and very low or no quantity of other items. For example, teenagers
may spend heavily on products such as cell phones and branded wears for snob
appeal, but may not spend on general and academic reading. A middle- aged
person may spend less on clothing, but may invest money in savings, insurance
schemes, pension schemes, and so on.

8. Improves standard of living: The buying behaviour 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. But if a person spends less on goods and
services, despite having a good income, they deprives themselves of higher
standard of living.

9. Reflects status: The consumer behaviour is not only influenced by the status
of a consumer, but it also reflects it. The consumers who own luxury cars, watches
and other items are considered belonging to a higher status. The luxury items also
give a sense of pride to the owners.
Importance of Studying Consumer Behaviour:
Role or importance of study of consumer behaviour can be explained with
reference to the points stated as under:

1. Modern Philosophy: It concerns with modern marketing philosophy –

identify consumers’ needs and satisfy them more effectively than competitors. It
makes marketing consumer-oriented. It is the key to succeed.

2. Achievement of Goals: The key to a company’s survival, profitability, and

growth in a highly competitive marketing environment is its ability to identify
and satisfy unfulfilled consumer needs better and sooner than the competitors.
Thus, consumer behaviour helps in achieving marketing goals.

3. Useful for Dealers and Salesmen: The study of consumer behaviour is not
useful for the company alone. Knowledge of consumer behaviour is equally
useful for middlemen and salesmen to perform their tasks effectively in meeting
consumers needs and wants successfully. Consumer behaviour, thus, improves
performance of the entire distribution system.

4. More Relevant Marketing Programme: Marketing programme, consisting

of product, price, promotion, and distribution decisions, can be prepared more
objectively. The programme can be more relevant if it is based on the study of
consumer behaviour. Meaningful marketing programme is instrumental in
realizing marketing goals.

5. Adjusting Marketing Programme over Time: Consumer behaviour studies

the consumer response pattern on a continuous basis. So, a marketer can easily
come to know the changes taking place in the market. Based on the current market
trend, the marketer can make necessary changes in marketing programme to
adjust with the market.

6. Predicting Market Trend: Consumer behaviour can also aid in projecting the
future market trends. Marketer finds enough time to prepare for exploiting the
emerging opportunities, and/or facing challenges and threats.

7. Consumer Differentiation: Market exhibits considerable differentiations.

Each segment needs and wants different products. For every segment, a separate
marketing programme is needed. Knowledge of consumer differentiation is a key
to fit marking offers with different groups of buyers. Consumer behaviour study
supplies the details about consumer differentiations.

8. Creation and Retention of Consumers: Marketers who base their offerings

on a recognition of consumer needs find a ready market for their products.
Company finds it easy to sell its products. In the same way, the company, due to
continuous study of consumer behaviour and attempts to meet changing
expectations of the buyers, can retain its consumers for a long period.

9. Competition: Consumer behaviour 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.
10. 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. Thus, the study of consumer behaviour
is the base for developing a new product successfully.

11. Dynamic Nature of Market: Consumer behaviour focuses on dynamic

nature of the market. It helps the manager to be dynamic, alert, and active in
satisfying consumers better and sooner than competitors. Consumer behaviour is
indispensable to watch movements of the markets.

12. Effective Use of Productive Resources: The study of consumer behaviour

assists the manager to make the organisational efforts consumer-oriented. It
ensures an exact use of resources for achieving maximum efficiency. Each unit
of resources can contribute maximum to objectives.

External Environmental Factors Affecting Consumer Behaviour:

It is defined as a complex sum total of knowledge, belief, traditions, customs, art,

moral law or any other habit acquired by people as members of society. Our
consumer behaviour, that is the things we buy are influenced by our background
or culture. Different emphasis is given by different cultures for the buying, use,
and disposing of products.
Sub-cultural Influences
Social Class
Social Group Influences
Family Influence
Personal Influences
Other Influences

Sub-cultural Influences:

Within a culture, there are many groups or segments of people with distinct
customs, traditions and behaviour. In the Indian culture itself, we have many
subcultures, the culture of the South, the North, East and the West. Hindu culture,
Muslim culture, Hindus of the South differ in culture from the Hindus of the North
and so on. Products are designed to suit a target group of customers which have
similar cultural background and are homogeneous in many respects.

Social Class:

By social class we refer to the group of people who share equal positions
in a society. Social class is defined by parameters like income, education,
occupation, etc. Within a social class, people share the same values and beliefs
and tend to purchase similar kinds of products. Their choice of residence, type of
holiday, entertainment, leisure all seem to be alike. The knowledge of social class
and their consumer behaviour is of great value to a marketeer.

Social Group Influences:

 A group is a collection of individuals who share some consumer
relationship, attitudes and have the same interest. Such groups are prevalent in
societies. These groups could be primary where interaction takes place frequently
and, consists of family groups. These groups have a lot of interaction amongst
themselves and are well knit. Secondary groups are a collection of individuals
where relationship is more formal and less personal in nature.

Family Influence

As has already been said, the family is the most important of the primary
group and is the strongest source of influence on consumer behaviour. The family
tradition and customs are learnt by children, and they imbibe many behavioural
patterns from their family members, both consciously and unconsciously. These
behaviour patterns become a part of children’s lives. In a joint family, many
decisions are jointly made which also leave an impression on the members of the
family.

These days the structure of the family is changing and people are going in
more for nucleus families which consists of parent, and dependent children. The
other type of family is the joint family where mother, father, grandparents and
relatives also living together.

Personal Influences

Each individual processes the information received in different ways and

evaluates the products in his own personal way. This is irrespective of the
influence of the family, social class, cultural heritage, etc. His own personality
ultimately influences his decision. He can have his personal reasons for likes,
dislikes, price, convenience or status. Some individuals may lay greater emphasis
on price, others on quality, still others on status, symbol, convenience of the
product, etc. Personal influences go a long way in the purchase of a product.

Internal or psychological factors:

The buying behaviour of consumers is influenced by a number of internal
or psychological factors. The most important ones Motivation and Perception.

a) Motivation: A need becomes a motive when it is aroused to a sufficient level

of intensity. A motive is a need that is sufficiently pressing to drive the person
to act.

So, motivation is the force that activates goal-oriented behaviour.

Motivation acts as a driving force that impels an individual to take action to
satisfy his needs. So it becomes one of the internal factors influencing consumer
behaviour.

b) Perception:
Human beings have considerably more than five senses. Apart from the
basic five (touch, taste, smell, sight, hearing) there are senses of direction, the
sense of balance, a clear knowledge of which way is down, and so forth. Each
sense is feeding information to the brain constantly, and the amount of
information being collected would seriously overload the system if one took it all
in. The brain therefore selects from the environment around the individual and
cuts out the extraneous noise.

Past experience:
This leads us to interpret later experience in the light of what we already
know. Psychologists call this the law of primacy, Sometimes sights, smells or
sounds from our past will trigger off inappropriate responses: the smell of bread
baking may recall a village bakery from twenty years ago, but in fact the smell
could have been artificially generated by an aerosol spray near the supermarket
bread counter.

1. Problem/Need Recognition: Recognition of need or a problem is the first stage of the

model. According to Bruner (1993) recognition of a problem arises in the situation where an
individual realizes the difference between the actual state of affairs and desired state of affairs.
The human need has no limit therefore; the problem recognition is a repetitive in nature.
According to Maslow theory, human being is always dissatisfied, when an individual’s one
need is satisfied another one will come out and this trend continues repetitively
.
2. Information Search: The next stage of the model is information search. Once the need is
recognized, the consumer is likely to search more product-related information before directly
making a purchase decision. However, different individuals are involved in search process
differently depending on their knowledge about the product, their previous experience or
purchases or on some external information such as feedback from others.

3.Evaluation of Alternatives: After gathering enough information at the first stage the
consumer gets into comparing and evaluating that information in order to make the right
choice. In this stage the consumer analyses all the information obtained through the search and
considers various alternative products and services compares them according to the needs and
wants. Moreover, another various aspects of the product such as size, quality, brand and price
are considered at this stage. Therefore, this stage is considered to be the most important stage
during the whole consumer decision making process.
Several factors and aspects need to be considered before making a purchasing decision.
Factors such as age, culture, taste and budget have all impact on the evaluation process by the
consumer. For example, when purchasing a furniture, the young people consider the factor
such as convenience and price where as the old people are likely to consider the quality and
design.
Moreover, celebrity endorsement is seen as another factor with great potential impact on
evaluation of alternatives stages of consumer decision making process. Cant et al. (2010)
explain the effectiveness of celebrity endorsements with perceived greatness people associate
with their idols and the willingness and desire to become like their idols.

4. Purchase Decision: Once the information search and evaluation process is over, the
consumer makes the purchasing decision and this stage is considered to be the most important
stage throughout the whole process. In this stage, the consumer makes decision to make a final
purchase as he or she has already reviewed all the alternatives and came to a final decision
point.
may consider buying the product through online stores rather than visiting traditional physical
stores.

5.Post-Purchase Evaluation: The final stage in the consumer decision making process is post-
purchase evaluation stage. Many companies tend to ignore this stage as this takes place after
the transaction has been done. However, this stage can be the most important one as it directly
affects the future decision making processes by the consumer for the same product.
Therefore this stage reflects the consumer’s experience of purchasing a product or service.
Simply, if the consumer is satisfies with the purchase it is likely that the purchase may
be repeated while if they have a negative experience from the purchase it is unlikely that the
consumer may make the decision to buy the same product from the same seller or even may
not buy the product at all.

PROBLEM RECOGNITION:

Business managers need to be skilled, have expertise in problem

recognition and solution techniques to be the greatest help in guiding their
company towards greater success. In problem recognition, the consumer
recognises a problem or need or want. The buyer recognises a difference
between his or her actual state and some desired state.
The need can be generated by internal stimuli when one of the person’s normal
needs hunger, thirst, sex, etc. rises to a high level sufficient to become a drive. A
need can also be generated by external stimuli.
Post-Purchase Behaviour: All the activities and experiences that follow purchase are
included in the post purchase behaviour. Usually, after making a purchase, consumers
experience post-purchase dissonance. They sometimes regret their decisions made. It mainly
occurs due to a large number of alternatives available, good performance of alternatives or
attractiveness of alternatives, etc.
The marketers sometimes need to assure the consumer that the choice made by them is the right
one. The seller can mention or even highlight the important features or attributes and benefits
of the product to address and solve their concerns if any.A high level of post-purchase
dissonance is negatively related to the level of satisfaction which the consumer draws out of
product usage. To reduce post-purchase dissonance, consumers may sometimes even return or
exchange the product.