Determinants

of Consumer
Behavior

Prepared by
Dr.D.Venkateswarlu
Associate Professor
Internal and external
factors influencing CB
A CUSTOMER IS THE MOST IMPORTANT VISITOR ON OUR
PREMISES,

HE IS NOT DEPENDENT ON US, WE ARE DEPENDENT ON

HIM.

HE IS NOT AN INTERRUPTION ON OUR WORK, HE IS THE

PURPOSE OF IT.

HE IS NOT AN OUTSIDER IN OUR BUSINESS HE IS A PART OF

IT.

WE ARE NOT DOING HIM A FAVOUR BY SERVING HIM,HE IS

DOING US A FAVOUR BY GIVING US THE OPPORTUNITY TO
DO SO.

-Mahatma Gandhi
 Internal factors influencing Consumer
behavior
 Definition of Consumer Behavior
 Factors influencing CB
 Types of Consumer Behavior
 Application of CB with Marketing prospect
 Individual aspects of CB
 Motivation
 Involvement
 Personality
 Perception
 Learning
 Attitude
 Consumer is the cause & purpose of all production
and marketing activities.

 Consumer behaviour is the study of when, why, how, and

where people do or do not buy a product.

 Customer behaviour study is based on consumer buying behaviour, with the

customer playing the three distinct roles of user, payer and buyer.

 CB determines a firm’s profitability. Further profitability is established into

loyal customer.

 Companies that develop a fuller understanding of consumers

will be better able to develop marketing strategies to meet
their needs.
“Consumer behavior is the process whereby individuals
decide what, when, where, how and from whom to purchase
goods and services.”- Walters and Paul.

In another words, consumer behaviour can be defined as the

behaviour of individuals or groups in regards to
acquiring, using and disposing of products, services, ideas
or experiences.

Research has shown that consumer behaviour is difficult to

predict, even for experts in the field.
 Social factors- family, roles and status, ref.
groups

 Economic factors- size of family, disposable

Income propensity to consume, consumer
credit.

 Cultural factors- values, Beliefs, arts

 Personal factors- age, occ., life style,

personality

 Physiological factors- basic needs

• Friendly/co-operative buyer
• Timid/reserved/shy buyer
• Silent buyer
• Undecided buyer
• Price or quality conscious buyer
• Argumentative buyer
• Suspicious buyer
• Impatient buyer
• Bargain buyer
• Impulsive buyer
• Over-cautious buyer
• Slow-thinking buyer
• Rude/ill-mannered buyer
• Clever/intelligent buyer
From the marketing point of view, understanding consumer
behavior is crucial to successful delivery of firms’ offering in the
market place.
 Market-Opportunity Analysis: this involves examining trends and
conditions in the marketplace to identify consumers’ needs and wants
that are not being fully satisfied.
 Target Market Selection: this has to do with identifying distinct
groupings of consumers who have unique wants and needs and the
selection of segment that matches the firm’s strength and offer better
opportunities.
 Marketing- Mix Determination: this involves developing and
implementing a strategy for delivering an effective combination of
want-satisfying features to consumers within target market.
 Marketing strategy: understanding of consumer behaviour is
Consumer behaviour can be define as the behaviour of INDIVIDUALS or groups in
regards to acquiring, using and disposing of products, services, ideas.

Personalit
Perceptio
y
n

Learnin
Involveme
g
nt

Motivatio
Attitud
n
e
 Motivation: Motivation is the driving force among
individual consumers that impel them to action.

 Definition: Motivation may be defined as psychological forces that

determine the direction of person’s behaviour, a person’s level of effort,
and a person’s level of persistence in the face of obstacles.

 In another words, motivation is the process that account for an

individual intensity, direction, and persistence of effort towards
attaining a goal.

 A motive is a construct representing an unobservable inner force that

stimulates and compels a behavioral response and provides specific
direction to that response.
 Involvement: Involvement is a reflection of strong motivation in the form
of high perceived personal relevance of a product or service in a
particular context.

 In other words, involvement consists of differences

in the intensity of interest with which consumers
approach their dealings with the marketplace.

 Involvement can vary in individuals depending on different situations

 Involvement is related to some form of arousal.

Involvement can be of 3 types
Routinised response behaviour: In
routinised response, we buy things as a
routine. These are products of daily use which
keep buying almost every now and then.

Low Involvement Decision: These are

decision in which some involvement is
necessary .These are higher value products
and involve certain amount of risk. These
products are not bought everyday but after a
few years or considerable period of time.

High Involvement Decision Making:

These decisions are very important as these
products are of very high value and involve
a lot of risk and are bought once in a life
time or few times in a life time.
 Personality can be described as the psychological characteristics
that both determines and reflect how a person responds to his or
her environment.
 How Personality is help full in marketing: Because no two people are exactly
the same, marketers can look for certain similar personality traits in different
consumers. These consumers
can then be grouped together based on this identified personality.
 Product Personality includes:
manly, adventurous, sporting, stylish, mature, etc.
 Colour can influence our emotions, our actions and how we respond to various
people, things and ideas.
 Brand personality means assigning human personality traits/characteristics to a
brand so as to achieve differentiation. These characteristics signify brand behaviour
through individuals representing the brand.
●Nature/characteristics of Personality.
●Personality reflects individual differences: Because the inner characteristics
that constitutes an individuals personality are a unique combination of factors, no
two individuals are exactly alike Example: Hero Honda- Splender and Hero Honda-
Karizma

● Personality is consistent and enduring: Personality is a set of response

tendencies that are consistent and endure over time. Consistency means that the
characteristics contributing to an individual's personality tend to carry over to a
variety of situations. Examples: Raymonds, Maruti 800.

●Personality is subject to change: Personality is, however, subject

to change over time, in response to situations and events in life and,
also, as part of a gradual maturing process.
● Examples: Godrej shaving creams, Mc Donald’s.
 Perception is defined as the process by which an individual
selects, organize and interprets stimuli into a meaningful and
coherent picture of the world.
 It can be described as “how we see the world around us”. In general,
perception is gathering information through our senses, which are
seeing, hearing, touching, tasting, smelling and sensing.
Elements of Perception:

 Sensation: Sensation is the immediate and direct response of the sensory

organs to stimuli. Examples of stimuli (i.e. sensory inputs) include products,
packaging, brand
names, advertisement.
Absolute Threshold: The lowest level at which an individual can experience a
sensation is called threshold. The point at which a person can detect and
differentiate between something and nothing is that persons absolute threshold
for that stimulus. Example : 200gms to 150gms, change in quality.
Elements of Perception:
 Subliminal Perception: Stimuli that are too weak or too brief to be
consciously seen or heard may nevertheless be strong enough to be perceived
by one or more receptor cells. This stimuli is beneath the threshold.
● Learning can be viewed as a relatively permanent change in behavior occurring
as a result of experience.

● From a marketing perspective, however, consumer learning can be thought of

as the process by which individuals acquire the purchase and consumption
knowledge and experience that they apply to future related behavior.

● Consumer learning is a process; that is, it continually evolves and changes as a

result of newly acquired knowledge.

● Both newly acquired knowledge and personal experience serve as feedback to

the individual and provide the basis for future behavior in similar situations.
Elements of Learning:

 Motivation: Motivation is based on needs and goals. Motivation acts as a

spur to learning. The degree of relevance, or
● involvement, determines the consumer’s level of motivation to search for
knowledge or information about a product or service.

 Cues: In the marketplace, price, styling, packaging, advertising, and store

displays all serve as cues to help consumers fulfil their needs in product-specific
ways. Cues serve to direct consumer drives when they are consistent with
consumer expectations.
● Marketers must be careful to provide cues that do not upset those expectations.

 Response: How individuals react to a drive or cue-how they behave

constitutes their response.

 Reinforcement: Reinforcement increases the likelihood that a specific

response will occur in the future as the result of particular cues or stimuli
 Consumer attitude is a learned predisposition to respond in a
consistently favourable or un- favourable manner with respect to a
given object.

 Thus, an attitude is the way we think, feel, and act

toward some aspect of our environment.
 Attitude occurs within and are affected by situations. By
situations it means events or circumstances that at a particular
point in time, influence the relationship between an attitude and
behavior.
 By keeping in touch with changing consumer attitudes, marketers
are better able to appeal to consumers through their marketing
messages and appeals.
Product/ Situations Attitude
Service
D Cold Total Running I’ve got an important
Nose meeting in 2hrs….
Hyuandi Cars Buying a I would like to buy a new
new car
car for my family….
LIC Insurance Life Now that I am father I
Insura want to make sure that
nce my family is provided
for…
Spice Jet Family My cousin is getting
wedding married
and I want to be there.
External factors
influencing CB
External factors influencing Consumer
behavior
1. Cultural Influence
2. Social & Peer Influence
3. Reference Groups
4. Opinion Leaders
5. Trends, Fashion, and Lifestyle Changes
6. Seasonal & Weather-Based Demand
1. Culture (Traditions and Beliefs That Affect Buying Habits)
Culture shapes what people like, how they celebrate, and what they buy.
Companies change their products to match different cultures.
Examples:
• Food Choices: McDonald's serves a McPaneer burger in India (vegetarian-
friendly) and a Teriyaki Burger in Japan because people have different food
habits.
• Festivals & Shopping: During Diwali in India, people buy new clothes,
jewelry, and home decor, while during Christmas, people in Western countries
buy gifts and decorations.
• Luxury Preferences: In China, luxury brands like Louis Vuitton are seen as
status symbols, while in Scandinavian countries, people prefer simple and
practical fashion.
2. Social Class (Income and Lifestyle Affect Purchases)
People from different income groups buy different types of products based on what
they can afford and what suits their lifestyle.
Examples:
• Cars: Rich people might buy Mercedes or Tesla, while middle-class families might
choose Toyota or Honda because they are more affordable.
• Clothing: Wealthy people may wear Gucci and Prada, while others prefer Zara
or H&M for stylish but cheaper options.
• Dining Choices: High-income people may eat at expensive fine-dining
restaurants, while others may choose fast-food chains like McDonald's or
Subway.
• Technology: Wealthy people buy the latest iPhones and MacBooks, while
budget-conscious buyers may choose Samsung or OnePlus phones.
3. Reference Groups (People Who Influence Our Choices)
A reference group is a group of people (friends, colleagues, social media communities)
that individuals look up to or compare themselves with. These groups shape opinions,
lifestyle choices, and brand preferences.
Examples:
• Peer Influence in Fashion: A college student notices that most of their friends
wear Nike sneakers, leading them to buy a pair to fit in.
• Fitness Communities: Someone who joins a gym sees that most people use Apple
Watches or Fitbits, so they buy one to track their workouts.
• Luxury Goods & Status Symbols: Young professionals in corporate jobs may see
their colleagues using Montblanc pens and decide to buy one to reflect their status.
• Online Gaming & Tech Purchases: Gamers who belong to online forums often buy
the latest gaming laptops or consoles based on what their gaming group
recommends.
4. Opinion Leaders (Influential Individuals Who Shape Buying Decisions)
Opinion leaders are people who have authority, expertise, or social influence in a
particular field. They can be celebrities, industry experts, social media influencers, or
thought leaders who affect consumer choices.
Examples:
• Technology Influence: When Elon Musk tweets about a cryptocurrency, thousands
of people invest in it, causing price fluctuations.
• Celebrity Endorsements: When Cristiano Ronaldo removes Coca-Cola from a
press conference table and promotes water instead, Coca-Cola’s stock value drops by
billions.
• Social Media Influence: A TikTok or Instagram influencer promotes a specific
handbag, leading to a surge in demand for that brand.
• Financial & Business Decisions: When Warren Buffett endorses a particular
5.Trends, Fashion, and Lifestyle Changes
Meaning: Trends and lifestyle changes influence what people buy. New styles, habits,
and social influences shape customer choices. Companies follow these changes to
attract customers and increase sales.
Examples:
• Athleisure Fashion: People now wear sportswear (like leggings and sneakers) daily,
not just for workouts. Brands like Nike, Adidas, and Lululemon expanded their
collections to match this trend.
• Eco-Friendly Products: Many people prefer sustainable products, so companies sell
bamboo toothbrushes, reusable bags, and electric cars to meet this demand.
• Smart Gadgets: Smartwatches, fitness bands, and home automation devices (like
Amazon Alexa and Google Nest) are popular as people focus on convenience and
technology in daily life.
6.Seasonal & Weather-Based Demand
Meaning: People buy different products based on seasons and weather conditions.
Businesses adjust their products and marketing to match these needs.
Examples:
• Summer vs. Winter Clothing: In summer, people buy shorts, sunglasses, and
light fabrics, while in winter, they buy coats, boots, and woolen clothes.
• Beverage Sales: Starbucks sells Pumpkin Spice Latte in fall, iced drinks in
summer, and hot drinks in winter to match customer preferences.
• Air Conditioners & Heaters: In hot weather, people buy air conditioners and
fans, while in winter, sales of room heaters and electric blankets increase.6.
Awesome
words