FLASHBACK NOTES// CLASS XI // MARKETING

TOPIC: CONSUMER BEHAVIOUR

MEANING OF CONSUMER BEHAVIOUR

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."

CONSTITUENTS OF CONSUMER BEHAVIOUR:

Consumer behaviour 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. There
may be Individual consumer and Business Consumer.

Buyer/User
The term "buyer" refers to one who buys product. But buyer might not
be the user of product. For example, Manish buys a blazer for her
father. Manish is the buyer but the ultimate user is his father.

IMPORTANCE OF STUDYING CONSUMER BEHAVIOR:

The study of consumer behaviour is very relevant for effective marketing management. It helps
significantly in the formulation of production and marketing strategies in the following manner-

Knowledge of consumer behaviour 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 etc. These facts give signals
to producers about marketing mix to be arranged for their product and to serve consumers in better
manner.
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.

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

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.

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 behaviour helps to satisfy such special needs. For example, Maggi introduced their
ketchups with emphasis on "It's different"

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) etc.
To remain updated with technological advancement and bring new products to the market at
faster Pace-Studying consumer behaviour 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

Most of the factors are inter-dependent and inter-related, and can be divided into four main
categories

Factors affecting consumer

buying behaviour

Cultural Social Psychological

Factors Factors Factors

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.
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
behaviour creates almost identical demand patterns.
Social Factors:
Social factors like family and reference groups also play significant role in determining consumer
behaviour in the following manner.

Social Factors

Reference Roles and Age and Life Education and Economic

Family Lifestyle
Groups Status cycle Stages Occupation Condition

(a)Family
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 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.

(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. For example: Amway products, Patanjali products are promoted by organic product
users.

(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 fulfil 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.
(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.

(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.

(f)Economic conditions
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.

Psychological Factors
To effectively market a product, marketers need to go to a psychological level of a consumer. The
study of a consumer's thinking helps to find out- How consumers think, feel, reason, react to
different environments and select between different alternatives (e.g., brands, products, and
retailers) Under this category, the following variables can be identified:
 (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. 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.

(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.

(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.

(d)Beliefs and Attitudes

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.

(e)Personality
Personality is the collection of inner psychological attributes
that characterize the outer behaviour 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.
DIFFERENT BUYING ROLES
Individuals or group of consumers play diverse
roles in different kinds of purchase situations. It has
been observed that there are eight different roles
played by people in the consumer decision process.

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.

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, i.e. 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.

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.

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.

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.

CONSUMER DECISION PROCESS STAGES

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.
 2. Information Search – In the second stage, the consumer gathers information related to
his/her fulfilment 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.

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.

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.

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 marketer can help by providing supportive information to the
buyer and by positive marketing communications.

The consumer buying process enables the consumers take informed decisions. Higher the extent of
satisfaction, higher the possibility of repurchase. Marketers usually look to reduce dissatisfaction as
a dissatisfied consumer not only shies away from a purchase but also affects others.