Unit

1
Prepared By:
Premendra Sahu
Asst. Professor, itm University
 Learning Objectives:

After studying this unit you should be able to:

Understand the meaning & definition of Consumer Behaviour.

Understand why Consumer Behaviour study is important.
Explain the linkage between Marketing Concepts & the study of Consumer
Behaviour.
Understand the reasons for studying Consumer Behaviour.
Describe the areas of study under Consumer Behaviour.
Ask yourself

1) why we make the purchases that they make?

2) what factors influence your purchases?
3) Changing factors in our society.
 Consumer behaviour
Consumer Behaviour is the study of
Individuals or Organisations and the
activities undertaken by them to
select, procure and use products or
services to satisfy their needs and
wants.
 Importance of the study of Consumer Behavior

Analysis Market Opportunity

Selecting Target Market
Marketing Mix Decisions (Product, Price, Distribution,
Promotion)
Use in social and Non profit Marketing
Development of Marketing Concept
The Societal Marketing Concept
Ethics in Marketing
 The activities undertaken by the consumer can be either of the
following:

1. Psychological activities involving thinking processes like considering

the need for the product or service, whether to purchase, what to
purchase,when to purchase, how to purchase, comparing the various
features and prices, reading the customer reviews etc.

2. Physical activities like going to a shop, looking and enquiring about the
alternatives, visiting an e-commerce site, transacting on the e-commerce
site, etc.
Study of various roles played by a customer

1. The Initiator
2. The Influencer
3. The Decision maker
4. The Buyer
5. The End user
 Types of Consumer Buying Behavior

Level of Involvement in purchase decision. Importance and intensity of interest in a

product in a particular situation.
Buyers level of involvement determines why he/she is motivated to seek information about a certain products and brands but virtually ignores others.
High involvement purchasesRoyal Enfield , high priced goods, products visible to others, and the higher the risk the higher the involvement.
Types of risk:
Personal risk
Social risk
Economic risk
 The four type of consumer buying
behavior are:

1.Routine Response/Programmed Behavior--buying low involvement frequently purchased low cost items; need very little search and decision effort;
purchased almost automatically. Examples include soft drinks, snack foods, milk etc.
2.Limited Decision Making--buying product occasionally. When you need to obtain information about unfamiliar brand in a familiar product category,
perhaps. Requires a moderate amount of time for information gathering. Examples include Clothes--know product class but not the brand.
3.Extensive Decision Making/Complex high involvement, unfamiliar, expensive and/or infrequently bought products. High degree of
economic/performance/psychological risk. Examples include cars, homes, computers, education. Spend alot of time seeking information and
deciding.Information from the companies MM; friends and relatives, store personnel etc.
4.Impulse buying, no conscious planning.
consumer buying process:-
 What is Customer Value?

Customer Value = Total Customer Benefits Total Customer Costs

 What is Customer Satisfaction?

Customer satisfaction can be classified as the match

between customer expectations of the product and the
products actual performance
 What is Customer retention?

Customer satisfaction can be classified as the match

between customer expectations of the product and the
products actual performance
Data Collection
Method
 Consumer Behavior Models

A model may be described as a representative of an actual system. It

represents the similar characteristics of a system. However various
models have been proposed based on various factors such as scope,
social, environmental, psychological, etc.
 Uses of Consumer Behavior Models

The chief purpose of proposing models is to identify

the purchasing behavior of consumers. However,
these models can be utilized in determining.
Buying attitudes of consumers.
Useful variables while purchasing.
The characteristics of various variables and
Interrelationships among them.
 Economic man model

Price Effect Lower the price of the product more will be the
quantity purchase.
Substitution Effect Lower the price of the substitute product,
lower will be the utility of the original product purchase.
Income Effect When more income is earned, or more money
is available, quantity purchased will be more.
Learning Model
Engel, Blackwell and Miniard Model (EBM Model)
Nicosia Model of Consumer Behavior