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CONSUMER BEHAVIOR

INTRODUCTION

Consumer is an individual who uses products or services for personal use and not for manufacture or
resale. Customer is someone who can make the decision whether or not to purchase an item at the store
and someone who can be influenced by marketing and advertisement advertisements.

CONSUMER BUYER BEHAVIOR

Consumer Behavior refers to the buying behavior of final consumers – individuals and households that
buy goods and services for personal consumption.

Definitions of consumer behavior

According to professors Leong Schiffman and Leslie L. Kanuk; “Consumer Behavior is study of how
individuals make decisions to spend their available resources, time, money, and effort on consumption
related items”. It includes the study of what they buy; why they buy; when they buy; how often they buy
it; and how often they use it.

FACTORS INFLUENCING CONSUMER BEHAVIOR

1. Cultural factors

Marketers need to understand the role played by the buyer’s culture, subculture, and social class.

a) Culture

Culture is the set of basic values, perceptions, wants and behaviors learned by a member of society from
family and other important institutions. Cultural influences vary greatly across and within countries.
Marketers aim at discovering cultural shifts to create new products that may be wanted.

b) Subculture

Subculture is a group of people with shared value systems based on common life experiences and
situations. Subcultures include nationalities, religions, racial groups and geographic regions. Many
subcultures make up important market segments, and marketers often design products and marketing
programs tailored to their needs.

c) Social class
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Social class is a relatively permanent and ordered divisions in a society whose members share similar
values, interests and behaviors. It is measured by a combination of income, occupation, education,
wealth, etc. Social classes show distinct product and brand preferences in areas such as clothing, home
furnishings, leisure activity, and automobiles.

2. Personal factors

A buyer’s decisions also are influenced by personal characteristics such as the buyer’s age and lifestyle
stage, occupation, economic situation, lifestyle, and personality and self-concept.

a) Age and lifecycle stage

People change the goods and services they buy over their lifestyles. Tastes in food, clothes, furniture,
and recreation are often age related. Buying is also influenced by the stage of the family lifecycle – the
stages through which families might pass as they mature overtime. Life stage changes usually result
from demographics and life-changing events – marriage, having children, purchasing a plot of land,
divorce, children starting school, changes in personal income, and retirement. Marketers often define
their target markets in terms of life-cycle stage and develop appropriate products and marketing plans
for each stage.

b) Occupation

A person's occupation affects the goods and services bought. Blue collar workers tend to buy more
rugged work clothes, whereas executives buy more business suits. Marketers tend to identify the
occupational groups that have an above-average interest in their products and services. A company can
even specialize in making product needed by a given occupational groups.

c) Economic situation

A person’s economic situation will affect his or her store and product choices. Marketers watch trends in
personal income, savings, and interest rates. Consumer economic situation has great influence on his
buying behavior. If the income and savings of a customer is high, then he will purchase more expensive
products. On the other hand, a person with low income and savings will purchase inexpensive products.

d) Lifestyle

People coming from the same subculture, social class, and occupation may have quite different
lifestyles. Lifestyle is a person’s pattern of living as expressed in his or her psychographics. It involves
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measuring consumers’ major AIO dimensions – activities (work, hobbies, shopping, sports, social
events), interests (food, fashion, family, recreation), and opinions (about themselves, social issues,
business, products). Lifestyle captures something more than the person’s social class or personality. It
profiles a person’s whole pattern of acting and interacting in the world. When used carefully, the
lifestyle concept can help marketers understand changing consumer values and how they affect buying
behavior. Consumers don’t just buy product; they buy the values and lifestyles those products represent.

e) Personality and self-concept

Each person’s distinct personality influences his or her buying behavior. Personality refers to the unique
psychological characteristics that distinguish a person or group. Personality is usually described in terms
of traits such as self-confidence, dominance, sociability, autonomy, defensiveness, adaptability, and
aggressiveness. Personality can be useful in analyzing consumer behavior for certain product or brand
choices.

Many marketers use a concept related to personality – a person’s self-concept (also called self-image).
The idea is that people’s possessions contribute to and reflect their identities, i.e., “we are what we
have”. Thus, to understand consumer behavior, marketers must first understand the relationship between
consumer self-concept and possessions.

3. Social factors

Consumer’s behavior also is influenced by social factors, such as the consumer’s small groups, family,
and social roles and status.

a) Groups

Group refers to two or more people who interact to accomplish individual or mutual goals. Reference
groups serve as direct point of comparisons and have an influence on a person’s behavior and attitudes.
Marketers try to identify these.

b) Word of mouth influence

The influence of personal words and recommendations of trusted friends, associates, and other
consumers on buying behavior.

c) Opinion leaders
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People within a reference group who, because of special skills, knowledge, personality or other
characteristics, exerts social influence on others. Marketers try to identify and direct their efforts towards
them. Buzz marketing involves enlisting or even creating opinion leaders to spread the word about
products.

d) Online social networks

Online social communities such as blogs, social networking websites, and virtual worlds – where people
socialize or exchange information and opinions. These are used by marketers to promote products and
build customer relationships. Although most brands have a social media presence, this requires
marketers to be careful as they are hard to measure and control.

e) Family

Family members can influence each other’s buying behavior and marketers are interested in their
internal roles. Moreover, the typical roles of husbands and wives are shifting and marketers need to
adapt. In addition, children have a strong influence on all family decisions.

f) Occupation

This affects the goods and services that are bought, allowing marketers to identify and specialize in
such.

g) Economic situation

Income, interest rates, savings have an effect on choices and during recession many companies have
been forces to redesign and reposition their offerings.

h) Lifestyle

Person’s pattern o’ living as expressed in his or her activities, interest and opinions. It profiles the whole
pattern of interactions with the world. It can help observe changes in values and buying behaviors.

i) Personality

The unique psychological characteristics that distinguish a person or group.it can be useful in analyzing
behavior for particular product or brand choices. Brands are also supposed to have personalities
attributed to them by marketing and consumers are likely to choose those that match their own. To
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understand consumer actions marketers must understand relationship between consumers’ self-image
and possessions.

4. Psychological factors

A person’s buying choices are further influenced by four major psychological factors: motivation,
perception, learning, and beliefs and attitudes.

a) Motive

Need that is sufficiently pressing to direct the person to seek satisfaction of the need. There are 2 most
popular theories of human motivation. (1) Freud suggested that people are unconscious about the forces
that shape their behavior and cannot understand them. Motivation researcher use techniques to search
for consumers’ hidden needs. (2) Maslow suggested that human needs are organized in a hierarchy
(psychological, safety, social, esteem and self-actualization needs). Person attempts to satisfy the most
basic needs first, moving to the next steps once the previous is finished.

b) Perception

Perception is the process by which people select, organize and interpret information to form a
meaningful picture of the world. This influences a person in different ways as perceptions are diverse
because of the following perceptive processes. Selective distortion - tendency of people to interpret
information in a way that will support what they already believe. Selective retention means that
consumers are more likely to memorize positive characteristics of their favored brand, and forget that of
a competing brand. Therefore, marketers worry whether consumers will at all perceive their offers.
Subliminal advertising refers to a situation in which consumers are worried whether they are affected by
marketing messages without knowing it as there are so many out there.

c) Learning

Learning refers to changes in an individual’s behavior arising from experience. Drive describes an
internal stimulus calling for action and it turns into a motive once directed at stimulus object. Cues
determine when, where and how a person responds influencing response in interest to buy the product.

d) Beliefs

Belief is a descriptive thought that a person holds about something based on knowledge, opinion and
faith and can make up brand and product images. Marketers are interested in the beliefs that people
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formulate about specific products and services because these beliefs make up product and brand images
that affect buying behavior. If some beliefs are wrong and prevent purchase, the marketer will want to
launch a campaign to correct them.

Through doing and learning, people acquire beliefs and attitudes. These, in turn, influence their buying
behavior. A belief is a descriptive thought that a person holds about something. Beliefs may be based on
real knowledge, opinion, or faith and may or may not carry an emotional charge. Marketers are
interested in the beliefs that people formulate about specific products and services because these beliefs
make up product and brand images that affect buying behavior. If some beliefs are wrong and prevent
purchase, the marketer will want to launch a campaign to correct them.

e) Attitudes.

Attitude is a person’s consistently favourable or unfavourable evaluations, feelings and tendencies

toward an object or idea. Attitudes put people in a frame of mind of liking or disliking things, of moving
toward or away from them. Attitudes are hard to change and thus, companies try to fit their products into
existing ones.

CONSUMER DECISION MAKING PROCESS

The Buyer Decision Processes are the decision-making processes undertaken by consumers in regard to
a potential market transaction before, during, and after the purchase of a product or service. Speed of
passing through the stages may differ, and some stages may be skipped with routine purchases.

Stage 1 - Problem or Need Recognition

This is the first stage of the Consumer Decision Process in which the consumer is able to recognize what
the problem or need is and subsequently, what product or kind of product would be able to meet this
need. It is oftentimes recognized as the first and most crucial step in the process because if consumers do
not perceive a problem or need, they generally will not move forward with considering a product
purchase.

Stage 2 - Information Search

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Information Search is a stage in the Consumer Decision Process during which a consumer searches for
internal or external information. Information search is considered the second of five stages that comprise
the Consumer Decision Process. During this stage, a consumer who recognizes a specific problem or
need will then likely be persuaded to search for information, whether it be internally or externally. This
is also when the customer aims to seek the value in a prospective product or service. During this time,
the options available to the consumer are identified or further clarified.

Stage 3 - Evaluating Alternatives

Evaluation of alternatives is the third stage in the Consumer Buying Decision process. During the
evaluation of alternatives stage, the consumer evaluates all the products available on a scale of particular
attributes. During this stage, consumers evaluate all of their product and brand options on a scale of
attributes which have the ability to deliver the benefit that the customer is seeking.

Stage 4 - Purchase

The purchase decision is the fourth stage in the consumer decision process and it is at this stage that
purchase actually takes place. During the purchase decision stage, the consumer may form an intention
to buy the most preferred brand or product. During this time, the consumer may form an intention to buy
the most preferred brand because he has evaluated all the alternatives and identified the value that it will
bring him.

Stage 5 - Post-Purchase Behavior

Post-purchase behavior is the final stage in the consumer decision process when the customer assesses
whether he is satisfied or dissatisfied with a purchase. How the customer feels about a purchase will
significantly influence whether he will purchase the product again or consider other products within the
brand repertoire (range). A customer will also be able to influence the purchase decision of others
because he will likely feel compelled to share his feelings about the purchase.

TYPES OF BUYING MOTIVES

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Buying motives of a buyer refers to the influences or motivations forces which determine his buying. In
other words, a buying motive is the inner feelings, urge, instinct, drive, desire, stimulus, thoughts, or
emotion that makes a buyer buy a certain product or service to satisfy his needs.

Product Buying Motives:

Product buying motives refer to those influences and reasons, which prompt (i.e. induce) a buyer to
choose a particular product in preference to other products. They include the physical attraction of the
product (i.e. the design, shape, dimension, size, color, package, performance, price etc. of the product)
or the psychological attraction of the product (i.e. the enhancement of the social prestige or status of the
purchaser through its possession), desire to remove or reduce the danger or damage to life or body of the
possessor, etc.

A) Emotional Product Buying Motives:

When a buyer decides to purchase a product without thinking over the matter logically and carefully
(i.e., without much reasoning), she is said to have been influenced by emotional product buying motives.
Emotional product buying motives include the following:

1. Pride or Prestige:

Pride is the most common and strongest emotional buying motive. Many buyers are proud of possessing
some product (i.e., they feel that the possession of the product increases their social prestige or status).
In fact, many products are sold by the sellers by appealing to the pride prestige of the buyers. For
instance, diamond merchants sell their products by suggesting to the buyers that the possession of
diamonds increases their prestige or social status.

2. Emulation or Imitation:

Emulation, i.e., the desire to imitate others, is one of the important emotional buying motives. For
instance, a housewife may like to have a silk dress for the simple reason that all the neighboring
housewives have silk dresses.

3. Affection:

Affection or love for others is one of the stronger emotional buying motives influencing the purchasing
decisions of the buyers. Many goods are purchased by the buyers because of their affection or love for
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others. For instance, a husband may buy a costly silk dress for his wife or a father buy a costly watch for
his son or daughter out of his affection and love.

4. Comfort or desire for comfort:

Desire for comfort (i.e., comfortable living) is one of the important emotional buying motives. In fact,
many products are bought for comfort. For instance, fans, refrigerators, washing machines, cushion
beds, etc. are bought by people because of their desire for comfort.

5. Ambition:

Ambition is one of the emotional buying motives. Ambition refers to the desire to achieve a definite
goal. It is because of this buying motive that, sometimes, customers buy certain things. For instance, it is
the ambition that makes many people, who do not have the facilities to pursue their college education
through regular colleges, pursue their education through correspondence courses.

6. Desire for distinctiveness or individuality:

Desire for distinctiveness, i.e., desire to be distinct from others, is one of the important emotional buying
motives. Sometimes, customers buy certain things, because they want to be in possession of things,
which are not possessed by others. Purchasing and wearing a particular type of dress by some people is
because of their desire for distinctiveness or individuality.

7. Desire for recreation or pleasure:

Desire for recreation or pleasure is also one of the emotional buying motives. For instance, radios,
musical instruments, etc. are bought by people because of their desire for recreation or pleasure.

8. Habit:

Habit is one of the emotional considerations influencing the purchasing decision of the customers. Many
customers buy a particular thing because of habit, (i.e. because they are used to the consumption of the
product). For instance, many people purchase cigarettes, liquors, etc. because of sheer habit.

B) Rational Product Buying Motives:

When a buyer decides to buy a certain thing after careful consideration (i.e. after thinking over the
matter consciously and logically), s/he is said to have been influenced by rational product buying
motives. Rational product buying motives include the following:
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1. Safety or Security:

Desire for safety or security is an important rational buying motive influencing many purchases. For
instance, iron safes or safety lockers are bought by the people because they want to safeguard their cash,
jewelries etc., against theft. Similarly, vitamin tablets, tonics (stimulants or energizers), medicines, etc.,
are bought by the people because of this motive, i.e. they want to safeguard their health and protect
themselves against diseases.

2. Economy:

Economy, i.e. saving in operating costs, is one of the important rational buying motives. For instance,
Bajaj bikes are preferred by the people because of the economy or saving in the operating cost, i.e.
petrol costs.

3. Relatively low price:

Relatively low price is one of the rational buying motives. Most of the buyers compare the prices of
competing products and buy things, which are relatively cheaper.

4. Suitability:

Suitability of the products for the needs is one of the rational buying motives. Intelligent buyers consider
the suitability of the products before buying them. For instance, a buyer, who has a small dining room,
naturally, goes in for a small dining table that is suitable, i.e. that fits in well in the small dining room.

5. Utility or versatility:

Versatility or the utility of a product refers to that quality of the product, which makes it suitable for a
variety of uses. Utility of the product is one of the important rational buying motives. People, often,
purchase things that have utility, i.e. that can be put to varied uses.

6. Durability of the product:

Durability of the product is one of the most important rational buying motives. Many products are
bought by the people only on the basis of their durability. For instance, buyers of wooden furniture go in
for teak or rosewood table, though they are costlier, as they are more durable than ordinary wooden
furniture.

7. Convenience of the product:

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The convenience of the product (i.e. the convenience the product offers to the buyers) is one of the
important rational products buying motives. Many products are bought by the people because they are
more convenient to them. For instance, automatic watches, gas stoves, etc., are bought by the people
because of the convenience provided by them.

C) Patronage Buying Motives:

Patronage buying motives refer to those considerations or reasons, which prompt a buyer to buy the
product wanted by him from a particular shop in preference to other shops. In other words, they are
those considerations or reasons, which make a buyer, patronize a particular shop in preference to other
shops while buying a product.

Patronage buying motives also may be sub-divided into two groups, viz. (a) Emotional patronage buying
motives and (b) Rational patronage buying motives.

A. Emotional Patronage Buying Motives:

When a buyer patronizes a shop (i.e. purchases the things required by him from a particular shop)
without applying his mind or without reasoning, he is said to have been influenced by emotional
patronage buying motives. Emotional patronage buying motives include the following:

1. Appearance of the shop:

Appearance of the shop is one of the important emotional patronage buying motives. Some people make
their purchases from a particular shop because of good or attractive appearance of the shop.

2. Display of goods in the shop:

Attractive display of goods in the shop also makes the buyers patronize a particular shop.

3. Recommendation of others:

Recommendation of others also constitutes one of the important emotional patronage buying motives.
Some people purchase their requirements from a particular shop because that shop has been
recommended to them by others, i.e., by their friends and relatives.

4. Imitation:
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Imitation also is one of the emotional patronages buying motives influencing the purchases of buyers.
Some people make their purchases from a particular shop just because other people make their
purchases from that shop.

5. Prestige:

Prestige is one of the emotional patronages buying motives of the buyers. For instance, some people
consider it a prestige to take coffee from a five-star hotel

6. Habit:

Habit is also one of the important emotional patronage buying motives. Some people make their
purchases from a particular shop for the simple reason that they have been habitually making their
purchases from that shop.

B. Rational Patronage Buying Motives:

When a buyer patronizes a shop after careful consideration (i.e. after much logical reasoning and careful
thinking) he is said to have been influenced by rational patronage buying motives. Rational patronage
buying motives include the following:

1. Convenience:

Convenient location or proximity of a shop is one of the considerations influencing the purchases of
many buyers from a particular shop. Many buyers, usually, buy their requirements from a near-by shop,
as it is convenient to them to make their purchases. Similarly, convenient working hours of the shop also
influence the purchases of good many buyers. For instance, if a shop works for a longer period of time
every day and even on Sundays, it will be very convenient to the buyers. As such, many buyers may
make their purchases from such a shop.

2. Low price charged by the shop:

Price charged by the shop also influences the buyers to patronize a particular shop. If the price charged
by a shop for a particular product is relatively cheaper, naturally, many people will make their purchases
from that shop.

3. Credit facilities offered:

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The credit facilities offered by a store also influence the buying of some people from a particular shop.
People who do not have enough money to make cash purchases every time prefer to make their
purchases from a shop which offers credit facilities.

4. Services offered:

The various sales and after-sale services, such as acceptance of orders through phone, home delivery of
goods, repair service, etc., offered by a shop also induce the buyers to buy their requirements from that
shop. Rational buyers are, often, influenced by the various services or facilities offered by the shop.

5. Efficiency of salesmen:

The efficiency of the salesmen employed by a shop also influences the people in patronising a particular
shop. If the employees are efficient and are capable of helping the buyers in making their purchases,
people naturally would flock to such a shop.

6. Wide choice:

Wide choice of goods offered by a shop is one of the rational considerations making the buyers
patronize a particular shop. People generally prefer to make their purchases from a shop, which offers
wide choice (i.e. wide varieties of goods).

7. Treatment:

The treatment meted out by a shop to the customers is one of the rational considerations influencing the
buyers to patronize a particular shop. Usually, people would like to purchase their requirements from a
shop where they get courteous treatment.

8. Reputation of the shop:

Reputation of the shop for honest dealings is also one of the rational patronages buying motives.
Usually, people would like to make their purchases from a store having reputation for fair dealings.

TYPES OF BUYING DECISION BEHAVIOR

1. Complex buying behavior – consumer buying behavior in situations characterized by high

consumer involvement (expensive, risky, rare product) in a purchase and significant perceived
differences among brands. Buyer goes through a learning process developing attitudes and
beliefs toward products.
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2. Dissonance-reducing buying behavior – consumer buying behavior in situations characterized by

high involvement but few perceived differences among brands. Customers may respond to price
and convenience. Post-purchase dissonance may occur afterwards as disadvantages are
uncovered and hear favorable things about competitors’ products.
3. Habitual buying behavior - consumer buying behavior in situations characterized by low
consumer involvement (low-cost, frequently bought products) and few significantly perceived
brands differences. No extensive search occurs, and buyers are not highly committed to any
brands.
4. Variety-seeking buyer behavior - consumer buyer behavior in situations characterized by low
consumer involvement but significant perceived brand differences. Consumers switch brands
often and try something different. In such situations marketing strategy of leaders and minors
differs.

ADOPTION AND DIFFUSION PROCESS FOR NEW PRODUCTS

New product - good, service or idea that is perceived by some potential customers as new. Adoption
process - the mental process through which an individual passes from first hearing about an innovation
to final adoption. Adoption is when one begins to regularly use the product.

Stages in adoption process:

1. Awareness of new product, but lack of info

2. Interest in seeking info about product
3. Evaluation of the product
4. Trial of the new product on a small scale
5. Adoption in terms of decision to make full and regular use of the product

Marketers should help consumers move through these stages.

Individual differences in innovativeness:

Some are consumption pioneers or early adopters, whereas others lag adoption. This suggests that
innovative companies should identify characteristics of innovators and early adopters and target them
with marketing.

Influence of product characteristics on rate of adoption:

Five characteristics are especially important in influencing the rate. They are the following.
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1. Relative advantage: whether innovation is superior compared to existing products

2. Compatibility: whether innovation fits existing values and experiences of potential consumers
3. Complexity: whether innovation is difficult to understand/use
4. Divisibility: whether innovation may be tried on limited basis
5. Communicability: whether results of using it can be described or observed by others