Introduction To Consumer Behaviour

Special Studies In Marketing BMS V Asst Prof Amarpriet Ghura
Introduction to Consumer Behaviour.

Before the industrial revolution, marketers were operating in a sellers market and the consumers would accept the goods and services offered by the manufacturer. However, with the inset of industrial revolution the process of marketing has undergone tremendous changes with the marketing decisions makers finding themselves removed from the direct contact with consumers. This is where the market is come to depend upon consumer research studies for more information on the spending habits of consumers. Research revealed that there is a multidisciplinary approach to study the consumer behaviour.
Definition
Consumer behaviour is defined as the behaviour that consumers display in searching for, purchasing, using, evaluate and disposing of products and services that they expect will satisfy their needs. Consumer buying behaviour refers to the buying behaviour of final consumers who buys goods and services for personal consumption. The scope of consumer behavior CB focuses on how individual make decision to spend their available resources (Time, money, effort) on consumption related item That includes:1. What they buy it? 2. When they buy it? 3. Where they buy it? 4. How often they buy it? 5. How often they use it?
Why Study Consumer Behaviour? Study of consumer behaviour helps you to answer How do consumers respond to marketing efforts the company might use? To implement the marketing concept, a plan to influence buyers. Eg- KFC had photo of Hindu Goddess sitting on Burger To understand complex influences on consumption process. Eg- Mobile operators gives you plans based on your consumption.(SMS, Local calls, STD, 3G) The post liberalization period has resulted in many companies entering the market with offering their goods and services. This has made each marketer to realize that it has to constantly upgrade the consumers knowledge about his product by finding new dimensions. This is because there has been a change in the physical behaviour of the consumer. The consumer of yesteryears was a silent person who uncomplainingly purchased the goods from the market place. There is a new customer emerging today. The reason why people study consumer behaviour are diverse and accordingly various views on consumer behaviour have been expressed. The field of consumer behaviour holds interest to consumers, marketers and scholars of human behaviour. As a marketer it is important to understand consumer behaviour, so as to be able to predict how consumers are likely to react to the various information and environment cues and accordingly devise marketing strategies. This will help them to earn a competitive advantage at the marketplace. Thus the study of consumer behaviour will enable us to become better and wiser consumers.
Research Perspective on Consumer Behaviour Thrust on studying CB by marketers was done for 2 reasons:1. To determine as to why consumers made purchase decision 2. To understand how consumers would react to promotional message Marketer could have access to all information about CDMP (consumer decision making process) Marketer induce consumers to take a +ve purchase decision The field of consumer research enable marketers to predict how consumers would react in the market place and to understand the reasons they made the purchase decisions they did. Quantitative research- Positivists research. The method of experimentation thru Observation & survey technique Various statistical method had to use for analysis purpose POSITIVISM. Consumer research undertaken from a managerial perspective to improve strategic marketing decisions is known as POSITIVISM. Positivists research is quantitative and empirical (practical), and tries to identify cause and effect relationships in buying situations and It is often supplemented with qualitative research. Eg- effect of sales on other variables such as price. Positivists generally use probability studies that can be generalised to larger populations. Eg- Does the advertisement has effect on the sales of product?
Qualitative research Interpretive research. Enables marketer to gain insight into some of psychological aspects of consumer behavior. Marketer prefers to use combination of both Qualitative research in more concerned with probing deep within the consumers psyche to understand the motivations, feelings and emotions that drive consumer behaviour. Qualitative research findings cannot be projected to larger populations. Interpretivism a qualitative research perspective is generally more concerned with understanding the act of consuming itself rather than act of buying. Interpretivists tend to view consumption experience as unique situations that occur at specific moments in time and therefore cannot be generalised to large populations.
Difference between positivism & Interpretivism
POSITIVISM Helps in prediction of consumer behavior Uses Quantitative R method Experiments , observation ,survey technique It works on certain assumption Consumer are rational decision maker They are problem solver Engage in information processing Its possible to EXTEND R to larger population INTREPRETIVISM Concentrate more on understanding consumption practices of consumer Uses Qualitative R method In depth interview Group discussion It works on certain assumption There is nothing as sole objective Reality is subjective Every consumption experience is treated as unique Findings CANNOT be extended to larger population
Example-Personal Mobile Phone. Consumer Research wants to know what kind of consumer buy Mobile Phone? What features they look for? What benefit do they seek? What type of calls they make?& for what reason? How likely are they to replace their old model with new model with added feature become available? Above information can provide mfg. With imp input for Product scheduling Design modification Promotional strategy Consumer Research Process. The consumer research process whether quantitative or qualitative in approach generally consist of 6 steps. The researcher must make every effort to ensure that the research findings are reliable and valid.

Consumer Research Process.
Defining the objective of the research
Collecting and Evaluating secondary data.
Designing a primary research study
Collecting primary data
Analysing the data.
Preparing a report on the findings.
What Influences Consumer Behavior? Cultural Factors Culture, Subculture & Social Class Social Factors Reference groups, Family, Social roles & status Personal Factors Age & stage in life cycle, Occupation, Economic circumstances, Lifestyle, Personality & self concept Psychological Factors Motivation, Perception, Learning, Beliefs and Attitude.
Cultural Factors Culture - The set of basic values, perception , wants and behaviours learned by a member of society from family and other important institutions. Culture is the most basic cause of a persons wants and behaviour. Every group or a society has a culture and culture influences on buying behaviour and vary greatly from country to country. Eg- Coconut oil is used for cooking in southern parts, where in sunflower oil is used in Northern parts. Subculture - A group of people with shared valued systems based on common life experiences and situations. Each culture contains smaller subculture. Subculture includes culture within religions , racial groups and geographical regions. Many subculture make up important segments and marketers often design products based on their requirements. Social Class - are societies relatively permanent and ordered divisions, whose members share similar values, interests and behaviour. Almost every society has some form of social structure. Eg- Upper class, Middle class, Lower class.
Social Factors Groups - Two or more people who interact to accomplish individual or mutual goals. A persons behaviour is influenced by many smaller groups that have a direct influence and to which a person belongs. These are called as membership groups. Eg- Sports Club, Gym Members, Gymkhana members. Primary Groups - These include family, friends, neighbours and coworkers. Secondary Groups These are more formal and have less regular interaction. Eg- Trade Unions, Religious Groups. Family - Family members can strongly influence buyer behaiour. Marketers are interested in the roles , and influence of the husband, wife and children on the purchase of different product and services. Roles and Status Role - consist of the activities people are expected to perform according to the persons around them. A person belong to many groups , family , clubs and organisations. The persons position in each groups can be defined in terms of both role and status. Eg- Mr. X plays the role of a father and a husband in his family , while in his company , he plays the role of a manager.
Personal Factors It includes Age and life cycle stage People change the goods and services they buy over their lifetimes. Eg -Tastes in food , clothes, furniture are often age related. Occupation A persons occupation affects the goods and services bought . Eg Blue collar workers tend to buy more work clothes, where in white collar workers buy more business suits. Eg Computer software companies design different products for brand managers, accountants, engineers. Economic situations A persons economic situation will affect product choice. Eg- Apple I phone, Virtue Mobile, BMW Lifestyle Lifestyle is a persons pattern of living. Understanding these forces involves measuring consumers major AIO dimensions. A- Activities work, hobbies, shopping, support. I - Interests food, fashion, etc. O Opinions about themselves, business, products etc. Personality and self concept Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to ones own environment. Each persons distinct personality influence his or her buying behaviour.
Psychological Factors It Includes Motivation Motive (drive) a need that is sufficiently pressing to direct the person to seek satisfaction of the need. Perception The process by which people select, organise and interpret information to form a meaningful picture of the world. Eg- Tata products are perceived as quality products. Learning Changes in an individuals behaviour arising from experience. Eg- A learner driver buys a second hand car and then a new car.. Beliefs and attitudes Belief is a descriptive thought that a person holds about something. Eg- I belief Nokia phones are more easy to use. Attitude A persons consistently favourable or unfavourable evaluations, feelings and tendencies towards an object or an idea. Eg- Family Planning is useful.
Consumer Decision Making Model The consumers decision to purchase or not to purchase a product or service is an important moment for most marketers. It can signify whether a marketing strategy has been wise, insightful and effective or whether it was poorly planned and missed the mark. This marketers are particularly interested in the consumers decision making process.
Decision is the selection of an option from 2 or more alternative choices. The process of consumer decision making can be viewed as 3 distinct but interlocking stages : The Input Stage - influences the consumers recognition of a product need and consists of 2 major sources of information. Eg- I need a Laptop since I'm doing MMS
1) The firms marketing efforts (the product itself, its price, promotion, and where it is sold) 2) The external sociological influences on the consumers (family, friends, neighbours and other non commercial sources, social class, cultural and sub cultural memberships) The Process Stage - focuses on how consumers make decisions. 1) The psychological factors inherent in each individual (motivation, perception, learning, personality, attitude) affect how the external inputs influence the consumers identification and acknowledgement of a need , prepurchase , search for information , and evaluation of alternatives. 2)The experience gained through evaluation of alternatives in turn, affects the consumers existing psychological attributes. Eg- Laptop at 3 diff stores The output Stage - of the consumer decision making model consists of 2 closely related post decision activities. 1) Purchase behaviour, which can be a trial purchase or a repeat purchase. Eg- If you are happy with the trial version only then you may give the final order.
2) The post purchase evaluation of the product feeds directly into the consumers experience in the process stage of the model. Eg- After using the product, you evaluate it with your expectations.
Theory of Motivation Abraham Maslow's hierarchy of needs theory sets out to explain what motivated individuals in life to achieve. He set out his answer in a form of a hierarchy. All human needs can be classified into 5 hierarchical categories and this hierarchy is universally applicable.
Maslow's Hierarchy of Needs. Physiological needs - Food, shelter, i.e., those needs needed for basic survival. Safety needs - The need to feel safe within your environment. Also refers to emotional and physical safety. Eg- Job security, Health Insurance. Social Needs - The need for love, friendship and belongingness. Esteem Needs The need for self respect, status and recognition from others. Self Actualisation The point of reaching ones full potential. Are you capable at excelling yourself. People are self aware , concerned with personal growth. Super market firm develop brands to meet physiological needs of hunger and thirst. Maslow's concept suggest that needs changes as we go along our path of striving for self actualisation. Maslow's concept is useful for marketers as it can help them understand and develop consumer needs and wants. McClellands 3 Needs Theory McClelland's idea suggests why it is that different people behave in different ways We all have more or less of a need on some of these factors, making each of us motivated toward different personal goals.
High nACH Need for Achievement drive to excel : drive to achieve in relation to a set of standards, to strive to succeed. Some people like goals, some do not. These people are high achievers. They are not gamblers. Eg- They take calculated risk. They avoid very easy or difficult task. People who have a higher nACH would probably make better entrepreneurs or sales people and be lousy team players High nPOW Need for Power the need to make others behave in a way that they would not have behaved otherwise. These people like being in charge More interested in the prestige of power than in effective performance. People who have a higher nPOW would probably make a better leaders but could be obnoxious (annoying) as salespeople. High nAFF Need for affiliation the desire for friendly and close interpersonal relationships These people strive for friendship. Prefer cooperative rather than competitive situations. Desire relationships with a high degree of mutual understanding. People who have a higher nAFF would probably make the best team players but would lack the self drive to be salespeople running their own territory.

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Special Studies In Marketing BMS V Asst Prof Amarpriet Ghura