Introduction to

ConsumerBehav
ior
Presented by
D.Venkateswarlu
Associate Professor
Definition of Consumer
Behaviour
 Definition of Consumer Behaviour

Consumer behavior refers to the study of how individuals, groups,

or organizations select, buy, use, and dispose of goods, services,
ideas, or experiences to satisfy their needs and desires.
 Description on Consumer Behaviour:
Consumer behavior includes all the activities involved in choosing, buying, using, and disposing of
products or services. It also examines the factors that influence these actions, such as personal
preferences, social influences, cultural background, and psychological reasons.
Some key aspects of consumer behavior:
• Psychological Factors: These include what people think, believe, feel, and what
motivates them to buy.
• Social Factors: The influence of family, friends, social media, and trends on buying
choices.
• Cultural Factors: Traditions, values, and lifestyles of different communities that
affect purchasing decisions.
• Personal Factors: A person’s age, job, way of living, income, and personality that
shape their shopping habits.
Understanding consumer behavior helps businesses create better marketing strategies,
making customers happy and loyal.
NEED FOR UNDERSTANDING
CONSUMER BEHAVIOUR
NEED FOR UNDERSTANDING CONSUMER BEHAVIOUR

Shorter product life

01 cycle
04 Changing lifestyles

Evolving consumer Faster technology

02 preferences
05 adoption

Environmental
03 concerns
1. Shorter product life cycle

Today’s consumers know more about their choices, expect better products, and
seek new options frequently. This has led to shorter product lifespans, especially for
items like mobile phones, cameras, and other electronics.

2.Evolving consumer preferences

Change is common today, and consumer preferences keep evolving. Colgate Herbal
toothpaste is an example of a product designed to meet the growing demand for
health-focused options.

3. Environmental concerns
As people become more aware of the environment, companies are creating eco-
friendly products. For example, Hindustan Unilever (HUL), which makes
detergents like Surf and Surf Excel, has introduced a washing powder that
requires less water for cleaning.
 4.Changing lifestyles:
A person's lifestyle shows how they see the world. Businesses need to follow
lifestyle trends and update their products. For example, Pepsi and Coca-Cola
introduced sugar-free drinks to attract health-conscious people, especially those with
diabetes.

5. Faster technology adoption

The Internet has made a lot of information easily available. People can now
compare and review products before buying. Buying air tickets online has become
very popular in recent years. Many airlines and travel agencies now let travelers
compare prices and book tickets online..
Types of consumers
 Loyal Discount- Impulse
Need-Based
Consumers Driven Buyers
Consumers
Consumers

Casual Bargain Habitual

Trendsetters Shoppers Hunters Buyers
 Types of consumers
When it comes to consumer behaviour, there are several types of
consumers based on their purchasing patterns, motivations, and
behaviour. Here are some common categories:
1.Loyal Consumers: These consumers stick to their preferred brands
and products, showing strong brand loyalty and making repeat
purchases.
For example, Sarah always buys Colgate toothpaste because she
trusts the brand, showing strong loyalty to it.

Discount-Driven Consumers: They are primarily motivated by

discounts, sales, and promotions. They'll often wait for deals before
making a purchase.
For example, John waits for the big sale at Zara before buying any
clothes, as he's always looking for discounts.
3.Impulse Buyers: These consumers make spontaneous purchasing
decisions without much planning. They're often driven by emotions or
immediate desires. For example, while shopping for groceries, Emily sees
a new flavor of chips and buys it on the spot without planning to.

4.Need-Based Consumers: They purchase items out of necessity and

are less influenced by marketing or brand loyalty. Their buying decisions
are practical and focused on fulfilling specific needs.
For example, Mark buys a new winter jacket because his old one is too
worn out, and he needs it for the upcoming cold weather.

5.Trendsetters: These consumers seek out the latest trends and

innovations. They're often early adopters of new products and
technologies.
For example, Mia is always the first among her friends to buy the latest
iPhone, eager to try out the newest technology.
6.Casual Shoppers: These consumers enjoy browsing and shopping
without a specific intention to buy. Their purchases are often leisurely
and not driven by urgent needs.
For example, David enjoys walking around the mall on weekends,
browsing for fun, and sometimes buys a coffee or a small accessory.

7.Bargain Hunters: Similar to discount-driven consumers, these

individuals actively search for the best deals and lowest prices, often
comparing products across multiple sources.
For example, Jenny spends time comparing laptop prices on Amazon
and Best Buy, trying to find the best deal before making a purchase.

8.Habitual Buyers: These consumers purchase the same products

regularly out of habit. Their buying decisions are often automatic and
based on routine.
For example, Tom always picks up the same box of Cheerios during his
weekly grocery run because it's part of his usual routine.
CHANGING PATTERN OF
INDIAN CONSUMER
BEHAVIOR
 CHANGING PATTERN OF INDIAN CONSUMER
BEHAVIOR

People in both cities and villages are changing how they spend money as
their income grows and they learn about new products. Markets are
expanding, and businesses must keep up with these changes.

Types of Consumers:

1.Rich Consumers (Wealthy People)

• Prefer expensive brands and luxury products.
• Like to shop in special stores and enjoy social activities.
• Always look for something unique and high-qual
2.Middle-Class Consumers
• Focus more on saving money than spending.
• Take time to research before buying anything.
• Prefer products that are durable, useful, and good value for money.
• Spend more time with family rather than going out frequently.

3.Working Women
•More women now have jobs and earn their own money.
•They make their own buying decisions based on their needs.
•Look for convenience, quality, and products that fit their lifestyle.

Why is This Important for Businesses?

People’s needs and preferences keep changing. To be successful,
businesses must understand these changes and offer products that meet
customer demands. Companies that stay connected to their consumers will
always be ahead of their competitors.
FACTORS INFLUENCING
CONSUMER BEHAVIOR
 FACTORS INFLUENCING CONSUMER
BEHAVIOUR
1.Marketing Stimuli: This includes the four Ps: product, price, place, and
promotion. Companies can control these elements to attract more customers
and grow their market share.

2.Environmental Stimuli: These are external factors like economic

conditions, technology, politics, and culture. For example, rising incomes or
new product technologies can affect buying behavior. Companies usually
can't control these factors.

The buyer's "black box" consists of their personal characteristics and

decision-making process. These include cultural, social, personal, and
psychological factors, which are hard for companies to influence directly.
 The buyer's decision process involves all the factors we've discussed,
..like external influences and the buyer’s characteristics. Based on these,
consumers will have different needs, preferences, and ways of
evaluating options. The process also varies depending on the product.
For example, buying an expensive item like a car takes more time and
thought compared to buying food or everyday goods.

The most important part of this process is the final buying decision,
where the consumer chooses the product that best meets their needs.
They decide on aspects like the product, brand, or store. Companies
study both external factors and buyer characteristics to influence this
decision. By understanding consumer needs and creating effective
marketing, businesses can increase their chances of being chosen over
competitors.
 General Model of Consumer Behavior
Input Output

The Buyer’s Black Box

External
ExternalStimuli
Stimuli
Buyer Buyer Decision The Buyer’s
Marketing Buying
Environment Characteristics Processes Decisions
Stimuli Stimuli Cultural Recognition of The choice of
the problem Product
Product Social
Brand
Economic Personal
The search for
Dealer
Psychological Quantity
Price Social information
Purchase timing
Place Political Evaluation
Promotion Decision

Technological
Post-purchase
behaviour
 MICRO FACTORS INFLUENCING CONSUMER
BEHAVIOUR
There are many micro factors influencing the consumers. These are
mentioned in and briefly discussed in the following section.
 CULTURAL FACTORS
In consumer behavior, culture is a major factor that influences the way
people think and make decisions, especially in large regions like our
country.

Culture is defined as the values, beliefs, needs, and behaviors learned

by a person from their family, community, and other important
institutions. It is the most fundamental cause of a person’s desires and
actions. Every group or society has its own culture, and this cultural
influence on buying behavior can differ greatly from one country to
another.
 Subculture

Subculture refers to groups within a larger culture that share more

specific identities, such as religion, race, or geographic location.

These groups are influenced by their unique customs and values.

Multicultural marketing emerged because different ethnic and
demographic groups often didn't respond well to general, mass-market
advertising, so companies began creating more targeted messages for
these specific groups.
 Social Factors
Social factors play a big role in shaping consumer behavior, including
the influence of groups, family, and social status. For example, a college
student in an urban area is influenced by her social group, keeping up
with the latest trends and fashion, often guided by youth icons like
filmstars or cricketers.

In India, celebrities like Mahendra Singh Dhoni and Bipasha Basu

influence young people. Reebok’s campaign with these stars effectively
targets trendy youth by connecting with their social influences.
 Reference group
A person’s reference group consists of all members of the group who
have direct (face to face) or indirect influence on his/her attitudes and
behaviour- 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 family members, friends, neighbours, and
colleagues).
 Family orientation
Family Influence
Parents and siblings greatly impact a person's views on religion, politics,
economics, self-worth, and personal ambition. The family plays a major
role in shaping a person's values and behaviors.

Family of Procreation
The spouse and children have a more direct influence on everyday
purchasing decisions. In India, family, including extended family and
friends, holds strong importance. Brands like Amul, which emphasize
family values, are widely accepted in the Indian market.

Role and Status

A person’s position in any group they belong to is defined by their role
and status within that group, which can affect their buying behavior.
 Personal Factors
• Age and life cycle stage
• Occupation and economic condition
• Personality and self-concept
• Lifestyle and status

Psychological Factors
 Motivation
 Perception
 Learning and experience
 Beliefs and attitudes
 UNDERSTANDING THE
BUYING DECISION PROCESS
 UNDERSTANDING THE BUYING
DECISION PROCESS
Marketers must understand every facet of consumer actions. Smart
companies try to fully understand the customers buying decision
process all the experiences in learning, choosing, using and even
disposing of a product starts long before the actual purchase action and
has consequence long afterwards.

1.Problem recognition:- The buyer recognizes a problem/need. This

can be triggered by internal/external stimuli. With an internal stimulus, a
person’s normal needs (hunger, thirst, and sex) cross a threshold level
and become a drive. Need can also be aroused by an external stimulus.
Problem Information Evaluation of
recognition search alternatives

Post-purchase Purchase
behaviour decision
2. Information Search:
Once a consumer's need is triggered, they begin searching for more
information. There are two levels of arousal in this search:

Heightened Attention: This is a mild search state where the consumer

is more open to product information.

Active Information Search: At this level, the consumer looks for more
detailed information by asking friends, browsing online, or visiting stores.

Marketers need to understand the key sources of information that

influence consumer decisions:
Personal: Family, friends, neighbors, and acquaintances.
Commercial: Salespeople, dealers, packaging, displays, advertising,
websites.
Public: Mass media, consumer rating organizations
Experiential: Handling, examining, or using the product.
3. Evaluation of Alternatives: Consumers gather information about
competing brands and make their final choice based on their needs and
benefits. The decision process is considered rational and conscious:

• The consumer aims to satisfy a specific need.

• They seek benefits that address their problem.
• Consumers view each brand as a combination of attributes offering the
desired benefits.

Marketers can respond by:

• Real Repositioning: Redesigning the product.

• Psychological Repositioning: Changing consumer perceptions

about the brand.

• Competitive positioning: Altering beliefs about competitors’ brands.

• Highlighting Strengths: Drawing attention to the brand’s key
advantages.

• Focusing on Neglected Attributes: Shifting attention to attributes

that are often overlooked.

• Changing Ideal Levels: Encouraging consumers to adjust their

ideal expectations for certain attributes.

4. Purchase Decision: At this stage, the consumer has decided on

their preferred brand and intends to make a purchase. The consumer
may make five key decisions:
1. Brand
2. Dealer
3. Quantity
4. Timing
5. Mode of Payment
Not every purchase decision involves all these sub-decisions. There are
non-compensatory models of choice, such as:

Conjunctive Heuristic: The consumer sets a minimum acceptable

standard for each attribute and chooses the first product that meets all
these standards.

Lexicographic Heuristic: The consumer selects the brand with the best
feature based on the most important attribute.

Elimination by Aspects Heuristic: The consumer compares brands

based on an important attribute and eliminates those that don’t meet the
minimum standard.

5. Post-Purchase Behavior: After the purchase, consumers might

notice issues with the product or hear about better features in other
brands. Marketers’ work doesn’t end with the sale; they must ensure
post-purchase satisfaction by monitoring product use and customer
feedback. This helps reinforce the consumer's choice and keeps them
INDUSTRIAL CONSUMER
BEHAVIOUR
 INDUSTRIAL CONSUMER BEHAVIOUR
Introduction:-
Industrial buying is a complex process involving multiple decision-
makers. It starts with recognizing the need for a product or
service. Economic growth leads to increased demand for industrial
goods and services, such as machinery, packaging, and
transportation. Industrial buying differs from consumer buying as it
involves fewer buyers and more specialized products and services.
Industrial Products
Involves
• Raw Materials
• Fabrication parts &Material
• Installation of Machinery
• Operating Suppliers
• Equipment
Industrial Buying Behaviour Meaning:
Industrial buying behaviour refers to the study of the motives
and actions of, and influences upon, industrial buyers while
engaged in the purchasing of goods and services.

Industrial Buyers:
Industrial buyer is an individual business, government agencies
are associations who make purchase decisions regarding
services, raw materials, product components are finished goods
are called organizational buyers.
Integration of Consumer
Behavior into Marketing
Strategy
Integration of Consumer Behavior into Marketing
Strategy
Product Development: Creating products that meet the specific needs
and preferences of target consumers.

Pricing Strategy: Setting prices based on perceived value, competition,

and consumer willingness to pay.

Promotional Tactics: Designing marketing messages that resonate with

the target audience, using insights from consumer behavior to craft
persuasive content.

Distribution Channels: Choosing the right channels to ensure products

are available where and when consumers want them.
Examples:
Customer-Centric Innovation: Companies like Apple and Tesla focus
on understanding their customers' needs and preferences, leading to
innovative products that delight consumers.
Personalized Marketing: Brands like Amazon and Netflix use data-
driven insights to offer personalized recommendations, enhancing the
shopping and viewing experience.
Emotional Branding: Companies like Coca-Cola and Nike create
emotional connections with consumers through powerful storytelling
and brand experiences.
By integrating consumer behavior insights into marketing strategies,
businesses can effectively reach and engage their target audience,
driving both short-term sales and long-term customer loyalty.
Rural Consumer behaviour
 Rural Consumer behaviour
1.Rural Consumer Behavior
Rural consumers are hesitant to try new products due to low income, lack of
education, and seasonal earnings from agriculture. Their buying decisions
focus on essential needs.

2.Price Sensitivity
Rural consumers are highly price-conscious. They often buy high-tech
products only after seeing others use them and understanding their
benefits.

3.Sales & Promotion

Advertising in villages relies on local newspapers, wall hoardings,
pamphlets, and TV, which is a popular medium for reaching rural
consumers. Discounts and gifts attract buyers.
4.Market Size
With over 600,000 villages and 70% of India’s population in rural
areas, the rural market is vast compared to urban cities and towns.

5.Understanding Rural Consumers

Marketers must carefully study rural consumer behavior, as
preferences for products, colors, and sizes vary across different
regions.
PROBLEMS IN STUDYING
CONSUMER BEHAVIOR
 PROBLEMS IN STUDYING CONSUMER BEHAVIOR

•Demographic Factors & Buying Behavior

Consumer purchasing decisions are influenced by factors like age, income,
gender, marital status, and family size.

•Challenges in Consumer Behavior Models

Existing models do not always fit real-life situations, as consumer behavior
is unpredictable and uncertain.

•Types of Buying Behavior

Impulse buying happens when customers make unplanned purchases.
Limited decision-making occurs when buyers rely on recommendations.
Routine shopping involves daily essentials bought with minimal thought.
•Market Dependency
Consumers are affected by constantly changing market conditions,
economic shifts, and evolving marketing strategies.

•Product Awareness Issues

With new products launching daily, consumers often lack the necessary
information to choose the best option for their needs