CHAPTER 2: CONSUMER BEHAVIOUR

SESSION 1
Consumer Behaviour 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.

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.

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

Constituents of consumer Behaviour:

Consumer behavior encompasses two constituents, namely consumer and buyer.

1. 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. There may be
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 organizational purchase.

2.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 behavior is very relevant for effective marketing management. It helps significantly in the
formulation of production and marketing strategies in the following manner

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 better

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.

3. To meet diversified consumer preferences

With globalization customers got more availability of more choices compared to pre-1991 era. Forex, the customer now
has many brands of cars to choose from like Hyundai, Honda, Ford, Lexus, Cadillac 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.
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"

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).

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

SESSION II: FACTORS AFFECTING CONSUMER BUYING BEHAVIOR

Factors affecting Consumer Buying Behavior:
To satisfy their needs, consumers tend to buy goods and services and come to a decision to make the best use of their
resources (time, money, effort). Consumer behaviour is the study of What to buy, Why to buy, When to buy, Where to
buy, How often to buy and Use it. In this buying process, many factors influence the decisionmaking. Most of these
factors are inter-dependent and inter-related, and can be divided into four main categories

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. 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 consumptionbehaviour. 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.

2.Social Factors:
(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 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.

(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.

(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 people and are advertised accordingly.

(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, 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.

3. 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) The behaviour of consumers while shopping or making other
marketing decisions The extent of consumer knowledge or information processing abilities which influence decisions
and marketing outcome What motivates consumers and their decision making strategies for different products
How can marketers adapt and improve their marketing campaigns and marketing strategies to effectively reach consum

(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.

(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.

©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

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.

(e)Personality
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.
 SESSION 3: DIFFERENT BUYING ROLES
Individuals or group of consumers play diverse roles in different kinds of purchase situations. There exists no hard and
fast role that buyers need to play; it is possible to characterize roles in the context of purchase decision. It has been
observed that there are 9 different roles played by people in the consumer decision process.

1. 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.

2. 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.

3. 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.

4. 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.

5. 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.

6. 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.

7. 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.

8. Maintainer: Members who service or repair the product so that it will provide continued satisfaction is a maintainer.

9. 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 task of the marketers is to understand the buying process and the role of the participants in the buying process.
S/H should initiate all of them to make a purchase of his product at different stages and through different strategies. The
study of consumer behavior will be incomplete if one discusses only about single role of the consumer. In certain
purchase decisions might involves at least one person acting one role, on other occasions a single individual can play
several roles at the same time. The important ones that are played by the consumer are.
-ACTIVITY: Prepare a list of ten products where the child plays an important role in the buying process

SESSION IV: 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.
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
Ex: BUYING A HOME, CAR Ex: BUYING JEWELERY, SNACKS
 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. Here they may also play a role through creating a new ideal state or by
increasing dissatisfaction with the actual state. The factors as mention

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. 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.

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. 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.

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 etc

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. 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.