What is Consumer Behaviour? Consumer behaviour or Buyer behaviour is defined as the behaviour that consumers display insearching for, purchasing, using, evaluating and disposing of products and services that theyexpect will satisfy their needs Consumer behaviour focuses on how individuals make decisions to spend their availableresources (time, money, effort) on consumption related items. That includes what they buy, whythey buy it, when they buy it, where they buy it from, how often they buy it, how often they useit, how they evaluate it after the purchase and the impact of such evaluations on futurepurchases and how they dispose of it.Factors Influencing Consumer Behavior Cultural Factors Culture (It is the fundamental determinant of a person’s wants and behavior) Subculture (It provides more specific identification and socialization for their members.It includes religions, geographic regions etc) Social Classes (Relatively homogeneous and enduring divisions in a society, which arehierarchically ordered and whose members share similar values, interests and behavior)
Social Factors Reference Groups (It consists of all the groups that have a direct or indirectinfluence on his/her attitudes or behavior) Family ( Family of orientation consists of parents and siblings whereas family ofprocreation consists of one’s spouse and children) Roles and Statuses ( A Role consists of the activities a person is expected toperform and each role carries a status)
Personal Factors Age And Stage In The Life Cycle Occupation And Economic Circumstances Personality And Self-Concept (Personality is a set of distinguishing human psychologicaltraits that lead to relatively consistent and enduring responses to environmental stimuli.Personality is often described in terms of such traits as self-confidence, dominance,defensiveness, adaptability etc. Consumers often choose and use brands that have abrand personality consistent with their actual self-concept (how one views oneself),although in some cases the match may be based on the consumer’s ideal self-concept oreven others’ self-concept) Lifestyle And Values ( A lifestyle is a person’s pattern of living in the world as expressedin activities, interests and opinions. Consumer decisions are also influenced by corevalues, the belief system that underlie consumer attitudes and behaviors)
Psychological Factors Motivation (Buyer’s needs are normally biogenic or physiological, and psychogenic orpsychological. When they are aroused to a sufficient level of intensity they becomemotives, urging the buyer to seek satisfaction. Abraham Maslow’s Hierarchy of Needsinclude Physiological needs, Safety needs, Social needs, Esteem needs and Self-actualization needs) Perception (Once motivated, how the motivated buyer acts is influenced by his or herperception of the situation. That is, how the buyer receives, selects, organizes andinterprets information.) Learning (Learning involves changes in buyer’s behaviour as a result of his experience) Beliefs and Attitudes (Beliefs may be founded on knowledge, opinion or faith. Attitudesreveal the judgements, feelings and tendencies of the buyer towards an object or idea).
Perception Selective Attention: It has been estimated that the average person may be exposed to over1,500 ads or brand communications a day. Because a person cannot possibly attend to all ofthese, most stimuli will be screened out- a process called selective attention Selective Distortion: It is the tendency to interpret information in a way that will fit ourpreconceptions. Consumers will often distort information to be consistent with prior brand andproduct beliefs. Selective Retention: People will fail to register much information to which they are exposed inmemory, but will tend to retain information that supports their attitudes and beliefs. Because ofselective retention, we are likely to remember good points about a product we like and forgetgood points about competing products.Buying Motives Buying motives are defined as ‘all the impulses, desires and considerations’ which persuade ormotivate a buyer to purchase a specific product. There are 2 different types of buying motives: Product Motives and Patronage Motives Product motives are the impulses, desires and considerations which make people buy a specificproduct. Product motives can be classified into emotional motives, rational motives, operationalmotives and socio-psychological motives.
The impulses and influences which persuade a buyer to buy from particular shops or companyexplain Patronage motives. Patronage motives can also be emotional and rational.Buying Roles Initiator (The Initiator is the person who first suggests or thinks of the idea of buying theparticular product or service) Influencer (An influencer is a person whose views and advice carry some weight in making thefinal decision) Decider ( The decider is a person who ultimately determines any part of, or the entire buyingdecision- whether to buy, what to buy, how to buy or where to buy) Buyer (The buyer is the person who makes the actual purchase) User (The user is the person or persons who consume or use the product or service)Types of Buyer Behavior Complex Buying Behaviour (Consumers are highly involved in a purchase when it is expensive,bought infrequently, risky and highly self-expresssive) Dissonance Reducing Buyer Behaviour ( Here the buyer will shop around to learn what isavailable but will buy fairly quickly because brand differences are not pronounced)
Habitual Buying Behaviour (Consumers have low involvement with most low-cost, frequentlypurchased products) Variety Seeking Buying Behaviour (Brand switching occurs for the sake of variety rather thandissatisfcation) Stages In the Buying Decision Process Problem recognition Information search Evaluation of alternatives Purchase decision PostpurchasebehaviourProblem recognition The buying process starts when the buyer recognizes a problem or need. The need can betriggered by internal or external stimuli. With an internal stimulus, one of the person’s normal needs- hunger, thirst, etc- rises to athreshold level and becomes a drive; or a need can be aroused by an external stimulus. A personmay admire a neighbour’s new car or see a television ad for a vacation, which triggers thoughtsabout the possibility of making a purchase.Information Sources: Personal: Family, friends, neighboursetc Commercial: Advertising, Websites, Sales persons, displays Experiential: Handling, examining, using the product
The attributes of interest to buyers vary by product: Cameras- Picture sharpness, camera speeds, camera size, price Mouthwash- Colour, effectiveness, germ-killing capacity, taste/flavor, price Tires: Safety, ride quality, priceA consumer’s decision to modify, postpone, or avoid a purchase decision is heavily influencedby perceived risk Functional risk: :It is the risk that the product will not perform as expected. Physical risk: It is the risk to self and others that the product may pose. ( “Is a cellular phonereally safe, or does it emit harmful radiation?”)
Financial risk: It is the risk that the product will not be worth its cost ( “ Will a new and cheapermodel of a Plasma TV monitor become available six months from now?”) Social risk: It is the risk that a poor product choice may result in social embarrassment. ( “Willmy classmates laugh at my new haircut?”) Psychological risk: It is the risk that a poor product choice will bruise the consumer’s ego ( “Will Ibe embarrassed when I invite friends to listen to music on my five-year-old stereo?”) Time risk: It is the risk that the time spent in product search may be wasted if the product doesnot perform as expected. (“Will I have to go through the shopping effort all over again?”)Postpurchase Behavior Delighted Satisfied Dissatisfied Postpurchase Cognitive dissonanceAdoption Process Buying decisions for new products go through different stages in an ‘Adoption Process’. Theadoption process is defined as “ the mental process through which an individual passes fromfirst learning about an innovation to final adoption”, and adoption as “ the decision by anindividual to become a regular user of the product”. (Everett M Rogers, Diffusion ofInnovations). The buyers go through 5 stages in the adoption process for a new product. They are: Awareness (The buyer becomes aware of the new product) Interest ( The buyer shows interest and seeks information about the new product) Evaluation (The buyer considers whether trying a new product will be worthwhile) Trial ( The buyer tries the new product as a sample to see how it is and whether it isworth buying it regularly) Adoption ( the buyer decides to become a regular customer of the new product)What Is Organizational Buying? Webster and Wind defines organizational buying asthe decision-making process by which formalorganizations establish the need for purchased products and services and identify, evaluate, andchoose among alternative brands and suppliers.
The business market consists of all the organizations that acquire goods and services used in theproduction of other products or services that are sold, rented, or supplied to others. The majorindustries making up the business market are manufacturing, construction, transportation etc.Various characteristics of Business Markets that contrast sharply with those of consumer markets: Fewer, larger buyers Close supplier- customer relationship Professional purchasing Several buying influences Multiple sales calls Derived demand Inelastic demand Geographically concentrated buyers Direct purchasingBuying Situations Straight Rebuy (The purchasing department reorders on a routine basis( E.g. office supplies, bulkchemicals) and chooses from suppliers on an ‘approved list”. Modified Rebuy (The buyer want to modify product specifications, prices, deliveryrequirements, or other terms) New task ( A purchaser buys a product or service for the first time (e.g., office building, newsecurity system). Stages in the Organizational Buying Process Problem Recognition ( The buying process begins when someone in the company recognizes aproblem or need that can be met by acquiring a good or service) General Need Description and Product Specification (The Buyer determines the needed item’sgeneral characteristics and required quantity) Supplier Search (The buyer tries to identify the most appropriate suppliers through tradedirectories, contacts with other companies etc) Proposal Solicitation (The buyer invites qualified suppliers to submit proposals)
Supplier Selection: (Before selecting a supplier, the buying center will specify desired supplierattributes and indicate their relative importance. For example, for products such as copyingmachine, the three most important attributes are technical service, supplier flexibility, andproduct reliability) Order-Routine Specification (After selecting suppliers, the buyer negotiates the final order,listing the technical specifications, the quantity needed, the expected time of delivery, returnpolicies and so on) Performance Review ( After the purchase is made, the buyer reviews the performance of thesupplier. The feedback normally comes from the user department. Based on the review, thebuyer may decide to continue, modify the contract or cancel further supply). Consumerism’ Organized efforts by individuals, groups and governments to help protect consumers frompolicies and practices that infringe consumer rights to fair business practices.Consumer Protection Act, 1986 Right to Safety: To be protected against the sale of goods and services which arespurious/hazardous for the life. Right to Information: To know the quality, quantity, weight and the price of goods/servicesbeing paid for, so that one is not cheated by unfair trade practices. Right to Choose: To be assured, wherever possible, access to a variety of goods and services atcompetitive prices.• Right to be Heard: To be heard and to be assured that the interest would receive dueconsideration at appropriate forums Right to Seek Redressal: To seek legal redressal againstunfair or restrictive trade practices or exploitation. Right to Consumer Education: To have access to consumer education