Consumer

Behaviour
At the end of the chapter you would get to know

▪ Meaning of Consumer
Behavior

▪ Factors affecting Consumer

Buying Behavior

▪ Types of Buying Behavior

▪ Buying Roles

▪ Consumer Buying behavior

Process
 Consumer Behavior

Why do
consumers
purchase and Psychological Influences
consume Personal Influences
products?
Social Influences
Cultural Influences
Copyright ©2003 Prentice Hall, Inc. 10 - 3
 What is consumer behaviour?
▪ Activities people undertake when obtaining, consuming, and disposing of
products and services

Obtaining Consuming Disposing

Consumer Behavior
 Obtaining Consuming Disposing

•How you decide •How you use the •How you get rid of
you want to buy product remaining product

•Other products •How you store the •How much you

you consider product in your throw away after
buying home use

•Where you buy •Who uses the •If you resell items
product yourself or
•How you pay for through a store.
product •How much you
consume
•How you
transport •How product
product home compares with
expectations
▪ Activities people undertake when obtaining, consuming, and disposing of
products and services
 A field of study that focuses on consumer activities

 Why and how people use products in addition to why and how they buy

▪ Buying behavior of individuals and households that buy products for

personal consumption.

▪ Consumer behavior: the study of the processes involved when individuals

or groups select, purchase, use, or dispose of products, services, ideas, or
experiences to satisfy needs and desires.
Model of Buying Behaviour
▪ Behavior is the response to any
external stimuli, which is targeted
towards any of our five, senses i.e.
eyes, tongue, skin, nose and ear.
 Consumer behavior is the
consumer’s response to the
marketing stimuli i.e. Product, price,
place and promotion and the
response to the modified marketing
mix.
 Why study consumer Behaviour?
▪ “The Customer is King”

▪ Consumer Behavior Determines the Success of Marketing Programs

▪ The individual’s decisions as a consumer determine their economic health

by making more effective consumption decisions while avoiding deceptive
practices harmful to them
Factors affecting influencing
 Cultural Factors
▪ Culture and Subculture
 The growing child acquires a set of values, perceptions, and behaviors through
his or her family and other key institutions.

 Each culture consists of smaller subcultures that provide more specific

identification and socialization from their members.

 It include nationalities, religions, racial groups, and geographic regions. When

subcultures grow large and affluent, enough, companies often design specialized
marketing programs to serve them. Such programs are known as Diversity
marketing. E.g. Vibrant Gujarat for NRG
▪ Social classes
 are relatively homogeneous and enduring
divisions in a society, which are
hierarchically ordered and whose
members share values, interests, and
behavior.

 Social classes reflect not only income,

but also reflect other indicators such as
occupation, education, and areas of
residence. Social classes differ in dress,
speech patterns, recreational preferences,
and many other characteristics.
 Social factors
▪ Reference group
 A person’s reference groups consist of all the groups that have a direct (face-to-
fact) or indirect on the person’s attitudes or behavior.

 Groups having a direct influence on a person are called membership groups.

 Aspiration groups are those a person hopes to join; dissociative groups are those
whose values or behavior an individual rejects.
 Reference Group

Membership Non Membership

Positive Membership
Positive
Attitude Group Aspiration Group
(Sports Group)

Negative
Attitude Disclamant Group Dissociative Group
(Social Class)
 Types of Membership Group
Informal Formal
Primary Family, Peers Team India

Shopping Pals/Sports Alumni Association

Secondary
 `

Types of Aspiration Group

Contact No Contact
Anticipatory Symbolic
(MBA Degree) (Team India)
▪ Family
 Marketers are interested in the roles and
relative influence of the husband, wife,
and children in the purchase of a large
variety of products and services.

 The wife has traditionally acted as the

family’s main purchasing agent,
especially for food, sundries, and staple-
clothing items.
▪ Role and Status
 A role consists of the activities a person
in expected to perform. Each role carries
a status.
 A sales manager has more status than an
office clerk.

 Marketers must be aware of the status-

symbol potential of products and brands.
 Personal factors
▪ Age and stage in the life cycle
 People eat baby food in the early years,
most foods in the growing and mature
years, and special diets in the later years.

 Taste in clothes, furniture, and recreation

is also age related.

 Consumption is shaped by the family life

cycle.
 Marketers pay close attention to changing
life circumstances-divorce, widowhood,
remarriage-and their effect on
consumption.
▪ Occupation and economic
circumstances
 A blue-collar worker will buy work
clothes, work shoes, and
lunchboxes. A company president
will buy expensive suits, air travel,
and country club membership.
 A company can tailor its products
for certain occupational groups:
 Computer software companies, for
example, design different products
for brand managers, engineers,
lawyers, and physicians.
▪ Life style
 People from the subculture, social class,
and occupation may lead quite different
lifestyles.
 A lifestyle is a person’s pattern of living in
the world as expressed in activates
interests, and opinions.
 Marketers search for relationship between
their products and lifestyle groups. For
example, computer manufacturer might
find that most computer buyers are
achievement-oriented. The marketer may
then aim the brand more clearly at the
achiever lifestyle.
▪ Personality and Self Concept
 Each person has personality characteristics that
influence his or her buying behavior.
 By Personality, we mean a set of distinguishing
human psychological traits that lead to relatively
consistent and enduring responses to
environmental stimuli.
 Personality is often described in terms of such
traits as self-confidence, dominance, autonomy,
esteem, sociability, defensiveness, and
adaptability.
 People like to purchase the brand, which suits to
their personality. E.g. Nike (Athletic, Sporty etc),
Pepsi (Youth)
 Psychological factors
▪ Motivation
 A need becomes a motive when it is
aroused to a sufficient level of intensity.

 A motive is a need that is sufficiently

pressing to drive the person to act.

 A motivated person is ready to act.

▪ Perception
 Perception is an individual process of
selecting, organizing and interpreting the
stimuli.

 People can emerge with different

perceptions of the same object because of
three perceptual processes:

 selective attention, selective distortion,

and selective retention.
▪ Selective Attention
 Because a person cannot possibly attend to
all of these, most stimuli will be screened
out-a process called selective attention.
 People are more likely to notice stimuli that relate
to a current need. A person who is motivated to buy
a computer will notice computer ads and he or she
will probably not notice DVD ads.
 People are more likely to notice stimuli that they
anticipate. You are more likely to notice computers
than radios in a computer store because you do not
expect the store to carry radios.
 People are more likely to notice stimuli whose
deviations are large in relation to the normal size of the
stimuli. You are more likely to notice an ad offering
$100 off list price of a computer than one offering $5
off.
▪ Selective Distortion:
 Selective distortion is the tendency to twist information into personal meaning
and interpret information in a way that will fit our preconceptions. Unfortunately,
there is not much marketers can do about selective distortion.

▪ Selective Retention:
 People will forget much that they learn but will tend to retain information that
supports their attitudes and beliefs. Because of selective retention, we are likely
to remember good points mentioned about a product we like and forget good
points mentioned about competing products. Selective retention explains why
marketers use drama and repetition in sending messages to their target market.
▪ Learning
 Learning involves changes in an
individual’s behavior arising from
experience.
 Most human behavior is learned.
 Generalization
 Suppose you buy an HP laptop. If your
experience is rewarding, your response to
computers and HP will be positively
reinforced.
 Later on, when you want to buy printers, you
may assume that because HP makes good
computers, HP also makes good printers. In
other words, you generalize your response to
similar stimuli.
 Discrimination
 A countertendency to generalization is
discrimination. Discrimination means that
person has learned to recognize differences
in sets of similar stimuli and can adjust
responses accordingly.

 For example: You recognize the difference

between the HP and other brand in the
product category like Sony etc.
Types of buying Behaviour
▪ High Involvement Product:
 A product is said a high involvement product when perceived risk (like financial
risk, sensory risk, physiological risk, psychological risk) attached with the
product is high for the individual customer so a car (Financial risk) can be high
involvement product and even a 2 rupee shampoo (High sensory risk- risk of
loosing hair) is also a high involvement product.

▪ Low Involvement Product:

 A product is said a low involvement product when perceived risk (like financial
risk, sensory risk, physiological risk, psychological risk) attached with the
product is low for the individual customer. So mostly low price products are a
low involvement product because of Low financial risk
▪ Complex buying behavior
 Happens when Product is High involvement
and significant brand difference exists. In
this case buyer goes for high information
search so as to reduce the perceive risk.

 Complex buying behavior involves a three-

step process.

 First, the buyer develops beliefs about the

product. Second, he or she develops
attitudes about the product. Third, he makes
a thoughtful choice. E.g. Selection of
course after 10th or 12th or purchasing a car
▪ Implication to the marketer
 The marketer of a high-involvement
product must understand consumers’
information-gathering and evaluation
behavior.
 The marketer needs to develop Strategies
that assist the buyer in learning about the
product’s attributes and their relative
importance,
 The marketer needs to differentiate the
brand’s features, use print media to describe
the brand’s benefits, and motivate sales
personnel and the buyer’s acquaintances to
influence the final brand choice.
▪ Dissonance Reducing Buying
Behavior
 Happens when product is high
involvement and few differences exist
among the brand.

 Here consumer will shop around to learn

what is available. If consumer will finds
quality difference then he will go for high
price. If the consumer finds little
differences, he simply buys on price or
convenience.
 After the purchasing consumer might
experience dissonance that seems from
noticing certain disquieting features or
hearing favorable things about other
brands, and will be alert to information
that support his decision. E.g. purchasing
floor tiles for you home or Movie of your
favorite actor.

 Here consumer first acted then acquired

new belief then ended up with a set of
attitude- might be a changed attitude.
▪ Habitual Buying behavior
 Many products are bought under conditions
of low involvement and the absence of
significant brand differences. E.g. salt.
Consumer has little involvement in the
product category. They go to the store and
reach for the brand. If they keep reaching
for the same brand then it is out of habit not
strong brand loyalty.
 There is evidence that consumer has low
involvement with the most low cost frequently
purchased products.
 Here consumer do not involve in high
information search, evaluation of alternatives
etc.
▪ Variety Seeking Buying Behavior
 Some buying situations are characterized
by low involvement but significant brand
difference. Here consumer often does a
lot of switching. Known as Variety
seeking or Novelty seeking buying
behavior. E.g. Pen
 BUYING ROLES
▪ Initiator: The person who first suggests the idea of buying the product or
service.

▪ Influencer: The person whose view or advice influences the decision.

▪ Decider: The person who decides on any component of a buying decision:

whether to buy, what to buy, how to buy, or where to buy.

▪ Buyer: The person who makes the actual purchase.

▪ User: The person who consumes or uses the product or service.

 Consumer Buying Process

Problem Information Evaluation of

Recognition Search Alternatives

Post Purchase Purchase

Behavior Decision
 `
1. Problem recognition
 The buying process starts when the buyer recognizes a problem or need. The
need can be triggered by internal or external stimuli.

 With an Internal stimulus, one of the person’s normal needs-hunger, thirst rises to
a threshold level and becomes a drive, or a need can be aroused by an External
stimulus. E.g. A Person admires a neighbor’s new car and wish to have the same
kind; or you see an ad of car on television and you wish to have a car.

 Marketers need to identify the circumstances that trigger a particular need. By

gathering information from a number of consumers, marketers can identify the
most frequent stimuli that spark an interest in a product category. They can then
develop marketing strategies that trigger consumer interest.
2. Information search
 The milder search state is called Heightened attention. At this level a person
simply becomes more receptive to information about a product and don’t put any
efforts from his side to get more information, he simply becomes more attentive
towards what comes towards him.

 At the next level, the person may enter an Active information search: looking
for reading material, phoning friends, and visiting stores to learn about the
product. Of key interest of the marketer are the major information sources to
which the consumer will turn and the relative influence each will have on the
subsequent purchase decision.
▪ Consumer Sources of information
1. Personal sources: family, friends, neighbors, and acquaintances.

2. Commercial sources: Advertising, salespersons, dealers, packaging, displays

3. Public sources: Mass media, consumer-rating organization

4. Experiential sources: Handling, examining, using the product.

 Total set Awareness set Consideration set Choice set Decision

▪ Total Set means total brand available to the consumer.

▪ Awareness Set means total brands consumer is aware about.

▪ Consideration Set means the brands, which meet initial buying criteria.

▪ Choice Set Strong contenders brands

▪ Decision: Final Decision of purchasing some product.

 Total set Awareness Consideration Choice set Decision
set set
NOKIA NOKIA NOKIA NOKIA
SAMSUNG SAMSUNG SAMSUNG SAMSUNG
MOTOROLA MOTOROLA SONY SONY
SONY SONY LG LG
LG LG PANASONIC
PANASONIC RELIANCE
RELIANCE TATA
TATA
3. Evaluation of alternatives

MOBILE ATTRIBUTES
Sound
Battery life Weight Price
System
NOKIA 10 8 8 8
LG 8 9 8 3
SAMSUNG 6 8 10 5
SONY 7 6 10 8
  We assume that Weightage given to each of the attribute is as follows.

 Battery life- 40% Weight- 20%

 Sound- 25% Price- 15%

▪ NOKIA = 0.40(10)+0.20(8)+0.25(8)+0.15(8) = 8.8

▪ SONY = 0.40(7)+0.20(6)+0.25(10)+0.15(8) = 7.7

We can see that the consumer is likely to favor the NOKIA brand of
mobile from the above calculation for the given attributes.
▪ 4. Purchase decision
▪ 5. Post purchase behavior

 Post purchase Satisfaction: The buyer’s satisfaction is a function of

closeness between the buyer’s expectations and the product’s perceived
performance.

 Post purchase Action: Satisfaction or dissatisfaction with the product will

influence a consumer’s subsequent behavior.
 Post Purchase Use and Disposal:
 Marketer should also monitor how consumer use and dispose the product. If consumer store
the product a closet the product is probably not very satisfying, word of mouth will not be
very strong. Consumer also finds new uses of product. Like soft drink as pesticides. This
may hurt the company’s brand image. So this needs to be taken care of. If consumer throws
the product away, the marketer needs to know how they dispose of it, especially if it can
hurt the environment.