CONSUMER BEHAVIOR

UNIT I
INTRODUCTION TO CONSUMER BEHAVIOR

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 1.1. Consumer

A consumer is a person or group of people, such as a household,

who are the final users of products or services.

1.2. Behavior
Behavior is the range of actions and mannerisms made by
organisms, systems, or artificial entities in conjunction with their
environment, which includes the other systems or organisms
around as well as the physical environment.

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 1.3. Consumer Behavior

Consumer behavior is the study of individuals,

groups, or organizations and the processes they
use to select, secure, and dispose of products,
services, experiences, or ideas to satisfy needs
and the impacts that these processes have on the
consumer and society.

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 1.4. Scope of Consumer Behavior
1. Consumer behavior is studied because success in the marketplace
requires knowing, attracting, satisfying, and retaining customers.
2. Firms must segment the market into groups with relatively
homogeneous preferences and target one group.
3. Firms must position their offerings in the hearts and minds of these
individuals in a favorable way.
4. Firms must examine all of the touch points that shape how a consumer
will respond to their offering.
5. Consumer Behavior Determines the Economic Health of a Nation.
6. Consumer behavior determines the success of marketing programs.
7. Organisations that are customer-centric use a total marketing approach
to focus their resources on satisfying customers.
8. Marketing is the process of transforming or changing an organization to
have what people will buy.
9. Consumer behavior determines everyones economic health by making
more effective consumption decisions while avoiding deceptive
practices harmful to them.
10. Public policy leaders and social commentators study consumer
behavior to alleviate over-consumption and under-consumption by
educating consumers about problems and providing assistance.

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 1.5. Applications of Consumer Behavior

1.5.1. Marketing Strategy

1.5.2. Regulatory Policy
1.5.3. Social Marketing
1.5.4. Informed Individuals

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 1.5.1. Consumer behavior and marketing strategy

Marketing strategies and tactics are based on

explicit or implicit beliefs about consumer
behavior. Knowledge of consumer behavior can
be an important competitive advantage and can
greatly reduce the odds of bad decisions and
market failures.

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 1.5.2. Consumer behavior and regulatory policy

Various regulatory bodies exist to develop,

interpret, and/or implement policies designed to
protect and aid consumer. Effective regulation of
many marketing practices requires an extensive
knowledge of consumer behavior.

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 1.5.3. Consumer behavior and social marketing

Social marketing is the application of marketing

strategies and tactics to alter or create behaviors
that have a positive effect on the targeted
individuals or society as a whole. As is true for
commercial marketing strategy, successful social
marketing strategy requires a sound
understanding of consumer behavior.

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1.5.4. Consumer behavior and informed individuals

Most economically developed societies are referred to as

consumption societies. Most individuals in these societies
spend more time engaged in consumption than any other
activity, including work or sleep. Knowledge of consumer
behavior can enhance our understanding of our
environment and ourselves. Such an understanding is
essential for sound citizenship, effective purchasing
behavior, and reasoned business ethics.

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 Principles of Consumer Behavior

1. The Consumer Is Sovereign.

2. The Consumer Is Global.
3. Consumers Are Different;
Consumers Are Alike.
4. The Consumer Has Rights

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 Evolution of consumer behavior

Consumers increasing influence

Manufacturer Wholesaler Retailer Consumer

Manufacturing Selling Marketing Consumer

Orientation Orientation Orientation Orientation

1750-1850 1850-1970 1970-2000 2000+

1750-1850 1760-1970 1970-2000 2000+

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Factors influencing Consumer Behavior

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 Organizational factors influencing consumer
behavior

Brand Quality
Product features Service
Advertising Store ambiance
Word of mouth Convenience
Promotions Loyalty programs
Retail displays Packaging
Price Product availability

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 Factors Affecting Consumer Behavior
Membership groups have a direct
influence and to which a person
belongs. Aspirational groups are
groups to which an individual
wishes to belong. Reference
groups are groups that form a
comparison or reference in
forming attitudes or behavior.
Opinion leaders are people within
a reference group with special
skills, knowledge, personality, or
other characteristics that can
exert social influence on others.
Family is the most important
consumer-buying organization in
society. Social roles and status
are the groups, family, clubs, and
organizations to which a person
belongs that can define role and
social status.
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Culture is a shared set of beliefs, values and
patterns of behaviour common to a group of
people.
Subcultures are groups of people within a
culture with shared value systems based on
common life experiences and situations. For
example: Chinese, Indians, Malays, Eurasians
Social classes are societys relatively
permanent and ordered divisions whose
members share similar values, interests, and
behaviors. Social classes are measured by a
combination of occupation, income, education,
wealth, and other variables. The major social
classes are upper upper class, upper middle
class, middle class, upper lower class, lower
lower class.
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 Factors Affecting Consumer Behavior
Personality refers to the unique psychological characteristics that
lead to consistent and lasting responses to the consumers
environment. Brand personality refers to the specific mix of human
traits that may be attributed to a particular brand. Self-concept
refers to peoples possessions that contribute to and reflect their
identities.

Psychological Factors

Motivation: A motive is a need that is sufficiently pressing to direct the

person to seek satisfaction.
Abraham Maslo s Hierar h of Needs
People are driven by particular needs at particular times.
Human needs are arranged in a hierarchy from most
pressing to least pressing.
Perception is the process by which people select,
organize, and interpret information to form a
meaningful picture of the world.
Learning is the changes in an individuals behavior
arising from experience.
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 Factors Affecting Consumer Behavior
Beliefs and Attitudes
Belief is a descriptive thought that a person has about something
based on knowledge, opinion and faith.
Attitude des ri es a perso s relati el o siste t e aluatio s, feeli gs, a d
tendencies toward an object or idea.

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 BUYING ROLES

Five roles people might play in a buying decision

1 A person who first suggests the idea of buying the

Initiator
product

2 Influencer A person whose view or advice influences the decision

A person who decides on any component of a buying decision: whether

3 Decider to buy, what to buy, how to buy, or where to buy

4 Buyer The person who makes the actual purchase

5 User A person who consumes or uses the product or service

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Buying Decision Process

Five stages in the buyer decision process

1. Need recognition
2. Information search
3. Evaluation of alternatives
4. Purchase decision
5. Post-purchase behavior

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The Buyer Decision Process
Need Recognition

Need recognition occurs when the buyer recognizes

a problem or need triggered by:
Internal stimuli
External stimuli

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The Buyer Decision Process
Information Search

Information search is the amount of information needed

in the buying process and depends on:
The strength of the drive,
The amount of information you start with,
The ease of obtaining the information,
The value placed on the additional information, and
The satisfaction from searching.

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The Buyer Decision Process
Information Search

Sources of information:
Personal sourcesfamily and friends
Commercial sourcesadvertising, Internet
Public sourcesmass media, consumer
organizations
Experiential sourceshandling, examining, using
the product

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 Sources and Role of Information

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The Buyer Decision Process
Evaluation of Alternatives

Evaluation of alternatives is how the consumer

processes information to arrive at brand choices.

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The Buyer Decision Process
Purchase Decision

The purchase decision is the act by the consumer to

buy the most preferred brand.
The purchase decision can be affected by:
Attitudes of others
Unexpected situational factors

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The Buyer Decision Process
Post-Purchase Decision

The post-purchase decision is the satisfaction or

dissatisfaction the consumer feels about the
purchase.
Relationship between:
Co su ers e pe tatio s
Produ ts per ei ed perfor a e

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The Buyer Decision Process
Post-Purchase Decision

The larger the gap between expectation and

perfor a e, the greater the o su ers
dissatisfaction.
Cognitive dissonance is the discomfort caused by a
post-purchase conflict

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The Buyer Decision Process
Post-Purchase Decision

Customer satisfaction is a key to building profitable

relationships with consumersto keeping and
growing consumers and reaping their customer
lifetime value.

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 Complete model of consumer behavior

Start
Need
recognition
Internal
search Influences
Search
culture
Exposure
social class
family
Stimuli Attention Alternative situation
(marketer evaluation
dominated, Memory
Comprehension
other) Individual
differences
Purchase
Acceptance resources
motivation &
Retention involvement
Outcomes knowledge
attitudes
personality,
values, lifestyle
External
search
Dissatisfaction Satisfaction
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 Need Recognition (& reminding)

When a current product isnt

Marketing helps
consumers recognize performing properly
(or create) an imbalance
between present status When the consumer is running
and preferred state out of an product

When another product seems State

Preferred
superior to the one currently used

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 The information search stage

An internal search involves the

scanning of one's memory to recall previous Personal sources
experiences or knowledge concerning (friends and family)
solutions to the problem-- often sufficient for
frequently purchased products.
Public sources (rating
services like Consumer
An external search may be necessary Reports)
when past experience or knowledge is
insufficient, the risk of making a wrong
purchase decision is high, and/or the cost of Marketer-dominated
gathering information is low. sources (advertising
or sales people)

The evoked set: a group of

brands from which the buyer can
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Buyer Behavior: The Decision Making Unit

Other people often influence a consumers purchase decision.

The marketer needs to know which people are involved in the
buying decision and what role each person plays, so that
marketing strategies can also be aimed at these people.
(Kotler et al, 1994).

Initiator: the person who first suggests or thinks of the idea of

buying a particular product or service.

Influencer: a person whose views or advice carry weight in making

the final buying decision

Decider: the person who ultimately makes the final buying decision
or any part of it

Buyer: the person who makes the actual purchase

User: the person who consumes the product or service
Note: teens are increasingly assuming more of these roles

Think about your past purchase who was in which role?

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 Relative influence of husbands & wives Wife
Dominant
Child clothing Womens
clothing
Final Information groceries
Pots & pans
decision search
NonRx
lamps
Toys/games
furniture
luggage
carpet
Paint wallpaper
refrigerator
vacations
Mens leisure clothing
Joint Mens business clothing
stereo
TV sets
camera
Financial planning

Family car Sport equipment

hardware

Lawn mower

Husband
Extent of role specialization Dominant

100 75 50
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Davis & Rigaux, 1974
Decision Processing

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CONSUMER BEHAVIOR

UNIT I
INTRODUCTION TO CONSUMER BEHAVIOR

BABY THOMAS 2014

34