Unit 1

Introduction to Consumer
Behaviour

FT 312MMIN
Slides by Prof: Deepika Mehrotra
CONCEPT
• Consumers are those individuals who
purchase commodities for deriving utilities
and using them to satisfy their needs.
• Behaviour is defined as “the series of
innumerable responses portrayed by
individuals.”
• A consumer market can be defined as all the
individuals and households who buy good and
services for personal consumption.
• Consumer behavior can be defined as : “All
psychological, social and physical behavior of all
potential consumers as they become aware of
evaluate, purchase, consume and tell others about
products and services”.
CONSUMER BUYING BEHAVIOUR DEFINED

Consumer buying behavior is the sum total of a

consumer's attitudes, preferences, intentions, and
decisions regarding the consumer's behavior in the
marketplace when purchasing a product or service.
The various disciplines affecting consumer Behaviour
are…..
anthropology psychology

sociology economics
DEFINITIONS

According to KOTLER & ARMSTRONG :

• “The buying Behaviour of final consumers,
individuals and households who buys goods and
services for personal consumption.”
According to ENGEL,BLACKWELL & MANSARD:
• “Consumer Behaviour is the actions and decision
processes of people who purchase goods and
services for personal consumption”.
• Marketers have to revolve every marketing activity
around the ultimate consumer.
• This shows why is it important to
understand and study consumer Behaviour.
 NEED FOR UNDERSTANDING CONSUMER
BEHAVIOR OR STUDY CONSUMER
BEHAVIOR

1. Shorter product life cycles : Consumers today are

more aware of the options available, are more
demanding and look for change more often.
2. Evolving Consumer preference: Change is the norm
today, and the consumer preferences offer no
exception. For e.g., Colgate herbal toothpaste was
launched as a superior added offering that appeals
to a new consumer aspiration of health.
3. Environmental concerns: as the environmental awareness
amongst consumers grow, firms are coming up with new products
that are environmentally friendly. For e.g., HUL launched Surf
Excel Quick wash and MAGIC washing powder variants that uses
less water and need less rinsing to clean clothes.

(Magic was launched in TN in September with the popular TV actress Raadhika

Sarathkumar as the brand ambassador. Apart from selling it at a very affordable
price of Rs. 2 per sachet, Magic also gave away free packets of Rin and Surf Excel
powders (500g and 1kg) in Tamilnadu, with an intent to help the consumers when
they need the most. )
4. Changing lifestyles: Lifestyles reflects a person’s
view about the world. Marketers have to monitor
these new trends in consumer lifestyles and
incorporate these changes in their products. For e.g.,
Pepsi and Coke have launched sugar-free drinks as
they target health-conscious urban consumers and
especially the diabetic populations.
5. Faster technology adoption: The advent of the internet
has led to an information boom. The internet allows
users to compare and review products before they
decide on a purchase. For e.g., comparing prices of same
model but different brands. (airlines, laptops, mobiles,
cars etc. )
• Marketers are eager to know how consumers make
their choice decisions and, therefore, try to gather
insights about the inner psychology and various
factors that influence this process.
• The study on consumers enables organizations in
improving their marketing strategies by
understanding many issues such as the following :
• How consumers think, feel, reason, and then select
among different alternatives (brand and products)

• How consumers are influenced by their environment(

e.g., culture, family, peer group and media )
• The behavior of consumer while shopping or making
any choice decisions.
• Limitations in consumer knowledge or information
processing abilities, which influence decisions and
marketing outcomes.
• How consumer motivation and decision strategies
differ between products that vary in their level of
importance or interest.
• How marketers can adapt and improve their marketing
campaigns or strategies to quickly penetrate into the
market.
 UNDERSTANDING THE BUYING
DECISION PROCESS

1. Problem recognition - The first step

is problem recognition. During this
step, the consumer realizes that she
has an unfulfilled need or want.

2. Information search - The next step is

to gather information relevant to what
you need to solve the problem.
• External search
• Internal search
• Sources of information
3. Evaluation - After information is gathered, it is
evaluated against a consumer's needs, wants,
preferences, and financial resources available for
purchase.
4. Purchase - At this stage, the consumer will make
a purchasing decision. The ultimate decision may
be based on factors such as price or availability.
5. Post-purchase evaluation - At this stage, the
consumer will decide whether the purchase
actually satisfies her needs and wants.
 TYPES OF BUYING BEHAVIORS
Let's take a brief look at four different types of consumer buying
behaviors.
1. Complex buying behavior or Extended problem-solving
buying: The consumer here spends considerable effort and
time to have his choice. This type of behavior involves a
high degree of consumer involvement in the buying
process with the consumer seeing a great difference among
brand choices. For. E.g. consumer buying a car, bikes,
digital camera, etc.

2. Routine or Habitual buying behavior - A typical

consumer's involvement in the buying process is low
because the consumer doesn't see much difference
between available brands in habitual buying behavior. For
e.g. bread, sugar, or a sack of flour.
3. Limited problem-solving buying)/ Dissonance Reducing
Buying Behavior: A limited problem solving can be
defined as intermediate point of low and high involvement
process. E.g. a new brand is introduced in familiar
category/product class. The consumer will try to gain as
much information on the new product before he decides
whether to stick with old brand or try out new one.
4. Variety-seeking behavior - Here consumer involvement is
low. There are significant differences between brands.
Here consumers often do a lot of brand switching. The
cost of switching products is low, and hence consumers
might want to try out new products just out of curiosity or
boredom. Consumers here, generally buy different
products not because of dissatisfaction but mainly with an
urge to seek variety. For example, a consumer likes to buy
a cookie and choose a brand without putting much thought
to it. Next time, the same consumer might may choose a
different brand out of a wish for a different taste. Brand
switching occurs often and without intention.
• For more details and examples read chapter 10
-Consumer’s decision making from Consumer Behavior:
Insights from Indian Market, by Ramanuj Majumdar
GENERAL MODEL OF
CONSUMER BEHAVIOR

OR

MODEL OF CONSUMER
BUYING BEHAVIOR
INPUT OUTPUT

External Buyer’s Internal

Black Box
 INPUT

External Stimuli
Marketing Environmental
Stimuli Stimuli

Product Economic
Place Social
Price Political
Promotion Technological

( EXTERNAL INFLUENCES)
 PROCESS OUTPUT

The Buyer’s Black Box / The Buyer’s Buying

Process Decision

Buyer Decision
Buyer The Choice of
Processes
Characteristics
• Recognition • Product
• Cultural • Brand
of the
problem • Dealer
• Social •
• The search for Quantity
information • Purchasing timing
• Personal
• Evaluation
• Decision
• Psychological
• Post-purchase
behavior
(POST DECISION BEHAVIOR)

(CONSUMER DECISION MAKING)

 DETERMINANTS OF CONSUMER BEHAVIOR

Personal Factors
 Age and Life cycle stage
Social Factors  Occupation and economic
• Reference group condition
• Family  Personality and self-
• Roles and status concept
 Lifestyle and status

Psychological
Cultural Factors Factors
• Culture  Motivation
• Sub-Culture  Perception
 Beliefs and
attitudes
Buyer  Learning
DETERMINANTS OF CONSUMER BEHAVIOR
/
MICROFACTORS INFLUENCING CONSUMER
BEHAVIOR

• Consumers do not make purchase decision in a

vacuum.
• Their buying behavior are influenced by cultural,
social, personal and psychological
determinants/factors.
Culture Factors

• Cultural factors have the deepest influence on

consumer behavior.
• It can be as “ Culture is the set of basic values,
perceptions, wants and behaviors learned by a
member of society from the family, place of
residence and other important institutions. Culture
is the most basic fundamental determinant of a
person’s wants and behavior. Every group or society
has a culture, and cultural influences on buying
behavior may vary greatly from country to country.”
 • Culture and religious festivals have huge impact on
Indian markets. Festivals like Diwali, Holi, Dussehra,
Eid, Durga Puja, Ganesh Chaturthi, Navratri, Onam and
Pongal, constitute the main buying period across India.

• During Diwali, people spent huge amount of money not

only on new items like jewelry, clothes, food (mithai),
utensils, firecracker, gifts but also on appliances and other
durable products.

• Shopping malls and companies marketing durable products

offer heavy discounts during the festive season.
• Subculture: It provides more specific identifications
and socialization for members belonging to a
particular religion, racial group, and geographic
regions. Multicultural marketing came up since
different ethnic and demographic groups did not
respond favourably to mass- marketing advertising.
 Social Factors

• Social factors heavily influence the consumers’ mindset.

Typical social actors include formation of informal and
formal groups, family and social status.
• For e.g. in India, celebrities like film stars and cricketers
and other public figures endorse few brands. Like in
2009 MS Dhoni and Bipasha Basu featured in Reebok
campaign because of their young trendy youth appeal.
• ‘In 2019- ‘She Got Ree’ Reebok campaign features
Katrina Kaif
• Social class : this is relatively homogeneous and enduring
divisions of the society as all human societies exhibit social
stratifications. The impacts of social class are :-
• Social class is determined by a cluster of variable rather than
a single variable (occupation, income, wealth, education or
value orientation)
• People within class tend to behave more alike than those
from two different classes ( e.g. dress, speech patterns and
recreational preferences )
• Person are perceived to be occupying senior positions
• Social classes shows distinct product and brand preferences in
many areas, differ in media preferences ( shows in TV ,
movies, different languages preference, etc.
• Examples Cadbury dairy milk increased its consumption
base by using film star Amitabh Bachchan, with a
variety of social themes prevalent in various parts of
India.
• Now Dark Milk Eadbury features Aishwarya Rai
(Chocolates for grown ups)
• Reference Group: A person’s reference group consists
of all members on his /her attitudes and behavior-
membership groups having direct influence on the
consumer.
• Primary Group: This is the group with whom the
consumer interacts fairly regularly in an informal
manner ( such as friends, family, neighbors, and
colleagues)
• Family Orientations: Parents and sibling exert a
significant influence. Indian consumers have high degree
of family orientation. Spouse and children also, directly
influence on everyday buying behavior.
• E.g. Brands like Amul knows that family values are easily
accepted in Indian markets.
• Secondary Group: This is the more formal group and
requires less interactions (religious, professional and trade
union groups). This is also the group having indirect
influence or the group to which the person does not really
belong.
• Tertiary groups:
- Aspirational groups which a person hopes to join
- Dissociative groups whose values or behaviors an individual
rejects.
• An opinion leader is a person who sometimes makes
informal communication and offers advice or information
about a specific product or product category. Hence
marketers try to reach out to such leaders by identifying
demographics and psychographic characteristics associated
with them, identifying with the media used by them, and
directing messages at them.
• Role and Status: A person’s position in each group
that he/she participates can be defined in terms of
the role and status of the person plays or has. Role
consists of the activities that a person is expected to
perform. Each role carries a status; people are found
choosing products that reflects their roles and the
desired/ the actual status in society.
• Therefore, marketers must be aware of the status
symbol and the potential of different products and
brands.
Example: KIA motors
Personal Factors

• The third set of possible factors of influence are

various personal factors.
• These include:
 Age and Life cycle stage
 Occupation and economic condition
 Personality and self-concept
 Lifestyle and status
• Age: Consumer preference and tastes undergo
considerable changes with age.
• Stages in the life cycle: Taste in food, clothes,
furniture and recreation is age related. As
consumption pattern is changed and shaped by the
family life cycle and the number, age, and gender of
the people in the household at any point in time.
• So, marketers should focus on critical life events.
• Occupation and economic condition: these two
factors influence consumption pattern and product
choices.
 Disposable income,
 saving and assets,
 debts,
 borrowing,
 power and
 attitudes towards spending/saving.

Example : UTI ad UTI Mutual Fund’s ad

'Haq ek behetar zindagi ka'
• Personality and Self-concept: Brand personality is
the specific mix of human traits that may be
attributed to a particular to a particular brand.
- Sincerity: down-to-earth, honest, wholesome, cheerful
- Excitement: daring, spirited, imaginative, up-to-date
- Competence : reliable, intelligent, successful
- Sophistication: upper-class, charming
- Ruggedness: out-doorsy/outgoing/extrovert, tough
• Lifestyle and status: Lifestyle is a person’s pattern
of living in the world as expressed in activities,
interests, opinions, etc. Lifestyle and status of the
consumers are constrained by money, time,
geographic location and source of income.
• E.g. Raymonds’- “ A complete Man” image.
Psychological Factors

• The psychological factors that shape a consumer’s

behavior are :
1. Motivation
2. Perception
3. Learning and Experience
4. Beliefs and attitudes
• Motivation: Maslow explains that a person will try to
satisfy his most important and basic needs first.
• But contrary to this, in poor/less income household,
you can find Television and mobile phones with
them and in their household. ( maybe because they
don’t want to be left out or entertainment aspiration
like TV is their important needs. )
• Perception: this can be related to different concepts like taste,
smell and touch. People have a sensation when they try a
product, experiences and prior knowledge about a product.
(e.g. Cadbury, Tajmahal etc.)
• Learning and experience: The knowledge or opinion that
people have about a product can be influenced by the company.
With new information or free samples, the companies can
manipulate the image of the product. E.g. Royal Enfield
• Beliefs and attitude : People can have a positive or negative
feeling about a product. This can be due to their personal
experience or because of their interaction with other people.
E.g. Nike and Big Bazaar.
MANAGING CUSTOMER VALUE
What is meant by value in marketing context and
what are the 4 types of values?

• Value in marketing, also known as customer-

perceived value, is the difference between a
prospective customer's evaluation of the benefits and
costs of one product when compared with others.
• Value may also be expressed as a straightforward
relationship between perceived benefits and perceived
costs: Value = Benefits - Cost.
• Values should always be defined through the "eyes" of
the consumer.
• The four types of value include: functional value,
monetary value, social value, and
psychological value.
What Do Customers Value Most?
• Low Prices. 
• High-Quality Products
• Quick Service and Good After-Sales Service.
• Products with Useful and Valuable Features.
• Products Tailored to Customers' Unique Needs
REVIEW QUESTIONS
• Discuss the steps involved in purchase decision of a
LCD TV. Also mention a few advertisements that
influenced you.
• What role do play marketers in post purchase
evaluation? Support your answers with relevant
examples.
• Discuss the non-marketing factors and marketing
factors that lead to problem recognition. Give
suitable examples.