CONSUMER BEHAVIOUR

Sita
Ramakrishnan

Topics to be covered:

Introduction
Definition
Why study CB
Factors affecting CB
Types of Buying Behaviour
Consumer involvement
Changing CB

INTRODUCTION

Prior to Industrial Revolution, sellers

market.
With inset of IR, marketing process
changed.
Study of CB insight to marketers on
planning and implementation of
marketing programs.

DEFINITION
2 definitions:
The decision making process and physical
activity involved in acquiring, evaluating,
using and disposing of goods and services

All psychological, social and behaviour of

all potential customers as they become
aware of, evaluate, purchase, consume and
tell others about products & services

Buying process starts much before the

actual purchase is made, in the minds
of the consumers.
Leads to finding alternatives,
evaluation of adv and disadv of
alternatives, internal and external
research, process of decision making,
purchase and post-purchase behaviour.

Why study CB?

3 perspectives:
Consumer
Marketer
Research

Consumer perspective:
To understand ones consumption
related decisions.
Why we buy, what we buy, how we
buy it and what influences our
decisions.
Better and wiser consumers.

Marketer perspective:
Predict how consumers would react
and devise marketing strategies
accordingly.
Competitive advantage.

Research perspective:
To gain insight as to why consumers
act in certain ways and what
influences them.
Branch of Human behaviour.

Positivism

Study to know the

causes of CB and use
them for influencing
consumers.
CB considered to be
applied science &
hence if prediction is
possible, it could also
be influenced.
Managerial
perspective.
Data collected thru
surveys, experiments
& observations and
quali in nature.

Interpretivism

Study to understand
CB and meaning
behind it.
Subjective aspects
like role of fantasy,
rituals etc included.
Each purchase
experience
considered unique
due to diverse set of
variables at play at
that particular
moment in time.
Insightful
understanding.

Factors affecting CB

Cultural Factors
Culture
Sub-culture
Social Class

Social Factors
Reference groups
Family
Roles & Status

Personal Factors
Age & Family Life Cycle
Occupation
Economic situation
Lifestyle
Personality & SelfConcept

Psychological Factors
Motivation
Perception
Learning
Beliefs & Attitudes

Cultural Factors
Includes values, beliefs, faith & tradition
of a group of buyers. Further divided
into:
Culture:
- Set of basic value perceptions, wants &
behaviours learned by a member of society
from family & other important institutions.
- Varies from country to country.
- Acts as a basis for market segmentation,
product development & advertising.

- Varied in a country like India where

people from different cultures live together.
- Exert deepest influence on consumer
behaviour.
- Marketers are always trying to develop
products as per culture shifts.
- Prominent culture shifts:
Leisure time, Health conscious &
Informality.

Sub Culture:
- Group of people with shared value system
based on common life experiences and
situations.
- Includes nationalities, religions, racial groups
& geographic regions.

Social Class:
- Divisions of social structure where members
share similar interests, values & behaviours.
- Based on income, education, occupation,
wealth & value orientation.

Social Factors
Further divided into:
Reference groups:
- All groups that have direct or indirect

influence on persons attitude or behaviour.

- Direct influence groups are those with
whom continuous interaction exists like
family, friends, colleagues & neighbours.
- Introduces a person to new lifestyles and
alters attitudes & self-concept.
- Each group has an opinion leader and
marketers try to influence them.

Family:
- Strongly influences buyer behaviour.
- Most imp consumer buying organisation.
- Marketers interested in the role & influence
of each member in buying decisions. Differs
between nuclear and joint family, type of
product & sub-divisions within each product
category.
- Mktg communications directed at influencing
person at various stages of the buying
process.

Changing role of children.

Roles & Status:

- Role consists of activities people are
expected to perform according to people
around them.
- A person belongs to many groups like
family, clubs, work place etc.
- Persons position in each group be defined
in terms of role and status.

Personal Factors
Includes:
Age & Family Life Cycle:
- Consumers needs, preferences & buying
vary as per age especially clothing,
furniture, recreational activities.
- FLC also determines consumption. The
consumption of a bachelor vs newly
married couple vs couple with children
varies greatly.

Occupation:
- Directly affects choice of products and
services.
- Marketers identify occupational groups
that might be interested in their products
and design mktg strategies accordingly.

Economic Situation:
- Includes spending income, savings &
assets, ability to borrow & attitude towards
spending vs saving.
- Increased per capita income and improved
standard of living, consumer willing to pay.
- Marketer has to conduct mkt analysis and
price products so as to motivate people to
buy them.

Lifestyle:
- Persons pattern of living as indicated by
activities, consumption and interest.
- Conveys more than social class or
personality alone.
- Expressed as AIO (Activities, Interest &
opinions).
- Marketers have to connect the lifestyle of
the user to the product.

AIO Statements
- AIO statements are characteristics of an
individual used to create a psychographic
profile.
- Product specific AIOs rather than general
AIOs have to be used for product devt.
- AIOs and quantifiable characteristics like
age, income, occupation, etc are combined to
get a better insight into individuals likes &
dislikes.

Personality & Self-Concept:

- Refers to unique psychological
characteristics that lead to relatively
consistent and lasting responses to ones
environment.
- People like to use products that match their
personality.
- Self concept is a mental picture of a person
about his own self.
- Prdts and services that we consume based
on how we want to perceive ourselves.

Psychological Factors
Dominate other factors as they are closer
to the mind of the buyer.
Motivation:
- Inner drive to fulfill the needs.
- Directs a person to seek satisfaction of a
need.
- Maslows theory of motivation talks about the
hierarchy of needs starting from physiological
needs, safety needs, social needs, esteem
needs & self-actualisation needs.

- Acc to this theory, a person will try to

satisfy his most imp need first and then
move on the next imp one and so on.
- Mkters have to keep in mind the role of
needs & motivation while working on the
buying motive of the target consumers.

Perception:
- The impression that a consumer forms
about a certain situation.
- Process of selecting, organising and
interpreting or attaching meaning to the
events happening in an environment.
- Perception of 2 individuals about the
same situation may differ.

Perceived risk
- Affects behaviour of a consumer.
- Can exist in the following situations:
a. when there are alternative uses of the
same financial resources
b. product may not function properly after
purchase
c. consumer may be criticised for his
purchase
d. not certain as to which product, brand or
model will be suitable to satisfy buying goals.

- Risk due to uncertainty of consequences.

- It can be reduced by gathering more info
about the product, self-examination of the
product, talking to existing users, taking
opinion of expert or opinion leaders.
- Cognitive style used.

Learning:
- Changes in individual behaviour caused by
information & experience.
- Most human behaviour is learned.
- Learning theorists say that a persons
learning is interplay of drives, stimuli, cues,
responses & reinforcement.
- Mkters should associate their products
with strong drives, using motivating cues
and providing positive reinforcement.

Beliefs & Attitudes:

- Acquired through learning process and
affects buying behaviour.
Belief
A thought held by a person about
something.
Based on knowledge, opinion, faith &
confidence.
Brand image is the result of belief.

Attitude
Favourable or unfavourable evaluation of a
product or service.
Develops over a period of time and longlasting.
Cannot be changed instantly.
Mkters should link product to existing
attitudes rather than change them.

Types of Buying Behaviour

4 types:
Complex buying behaviour:
- Products are high involvement & high degree
of perceived difference among brands.
- High involvement due to uncertainty of
products quality, high price, personal factors
such as whether the products image and
needs served are matching those of consumer.
- The more socially visible, the higher the
involvement.

- Consumer will try to gather information

about the product and then assimilate it
into beliefs about the products quality and
benefits.
- Cognitive decision-making behaviour and
hence mkters should respond with
promotions that are information-rich.
Eg: Cars, Homes.

Dissonance-reducing buying behaviour:

- Products are risky, infrequently purchased,
expensive hence high involvement & little
perceived difference among brands.
- Consumers may buy the products that are
best priced and relatively quickly.
- Environmental factors such as convenience
may affect decisions.
- After purchase, consumer might experience
post-purchase dissonance, believing that there
was actually something better in the market.

- Cognitive & behavioural decision-making.

- Eg: Cell-phones

Habitual buying behaviour:

- Products are low involvement, little brand
differences and frequently purchased.
- Consumers passively receive info about
the product through tv or internet.
- Repetitive advertising creates familiarity
which might translate into brand purchase
at the time of purchase.
- Behavioural decision-making and hence
advtsg focuses on classical conditioning.
- Eg: Daily use products like toothpaste,
shaving creams, etc.

Variety-seeking buying behaviour:

- Products are low involvement & significant
differences in brands.
- Consumers switch brands if not satisfies with
earlier product or just to try out a new product.
- Advtsg differs across firms. Leader employs
conditioning strategies to encourage
habituation & challenger employs cognitive
approaches to induce switching.
- Eg: Personal care products.

Consumer Involvement
Intensity of interest in a product.
Depends on consumers values and selfconcept which influence degree of
personal importance ascribed to a
product.
3 types:
Routinised response/Least Involvement
Low Involvement
High Involvement

Least
Involvement

Low
Involvement

High
Involvemen
t

Nature
of
product

Routine
buying

Bought after
few
yrs/considerabl
e amt of time

Bought once
in a
lifetime/few
times in life

Risk
factor

No risk

Some amount
of risk exists

Lot of risk

Value of
product

Nominal value Higher value

hence
switching is
high

Expensive

Eg

Daily use
products like
toothpaste,
shaving

Car, homes,
jewellery

Refrigerators,
Washing
machines, TV

Changing CB
Drastic changes in consumption pattern and
behaviour of consumers in the last 2
decades.
Reasons:
- Globalisation & liberalisation
- Easy access to tv and internet
- Fast food centres
- New avenues for travel & communications
- Customer is treated as King and mkters are
differentiating their products.
- Customer Service is considered important.

Earlier
Low Income
Non-availability of
products
Limited choice of
products
Traditional methods
of buying
Unaware due to lack
of info/exposure

Now
Higher income/double
income
All products available
Large amount of
choice
Modern in thinking
Aware due to easy
access to info/high
exposure